CD Interest Is Taxable. Here's How to Report It (and What You'll Pay)

A certificate of deposit can be a great way to grow your money at a predictable rate. Unlike savings accounts, whose rates can change anytime, your CD rate is fixed for the entire term, so your earnings are guaranteed. However, the government wants its share of those earnings. When it's time to file your tax return, you'll need to report any interest you've earned on your CD over the tax year. You'll also need to pay taxes on a percentage of it. Here's what you need to know to make sure you're doing everything right. 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 ... Read full article.