CD Owners: This Is What You Need to Know About Taxes

One of the top perks of a certificate of deposit is guaranteed returns. When you open a CD, you know precisely how much interest you'll earn because your rate is fixed for the term. But not all of that interest is yours to keep. The government views any interest accrued on CDs, savings and other deposits as taxable income, which means you must report it and pay the government its share. If you have a CD that's earned interest over the tax year, here's what you need to know. Read more: Best Tax Software of 2025 How are CDs taxed? "Interest paid on your CDs will be taxed as ordinary income just like wages when you file your taxes," said Lisa Greene-Lewis, a certified public accountant with TurboTax. That means your CD interest is taxed at your ordinary federal income tax rate based on your tax bracket. Tax rates for the year 2024 range from 10% to 37% and depend on your income and filing status, Greene-Lewis said. When do you pay taxes on a CD? If you earn at least $10 in interest ... Read full article.