Yes, You Have to Pay Taxes on Your CD Interest. Here's How to Do It

If you have a certificate of deposit, don't forget your CD earnings when you're preparing your tax return. The government expects its cut, so you'll need to report any interest you've earned over the tax year. Here's what you need to know about how to pay taxes on your CD interest -- and how much you might owe. 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 from a CD during a year, your financial institution must report that interest to the IRS. If you invest in a short-term CD that matures the same year it was purchase ... Read full article.