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Kiplinger reported that Credit One Bank offered an 18-month jumbo CD at a 4.50% APY, with a $100,000 deposit projected to earn $6,825.38 over the term. The return depends on the rate and account terms, while early withdrawal penalties, taxes and the possibility of later rate changes affect whether the CD suits a saver.
Kiplinger reported that a $100,000 deposit in Credit One Bank’s 18-month jumbo CD, listed at a 4.50% APY, would earn about $6,825.38 over the term. The estimate gives savers a concrete way to compare a fixed-return deposit with keeping cash more accessible, but the rate, withdrawal rules and taxes matter to the amount a customer ultimately keeps.
The reported offer had an 18-month term and no monthly account fees, according to Kiplinger. The article’s calculation assumes a minimum deposit of $100,000 and the stated APY remains in effect for the full term. The source does not provide a complete account agreement or explain every assumption behind the dollar calculation, so prospective customers should check the bank’s current disclosures before relying on the estimate.
A certificate of deposit generally pays a fixed rate during its term. That can make the return more predictable than a variable-rate savings account, but it also means the account’s APY does not rise if market rates increase while the money is locked in. Kiplinger cautioned that early withdrawals can trigger penalties; with a large balance, a penalty could reduce interest earned. The article does not specify the penalty for this particular product.
The quoted earnings are before taxes. Kiplinger says CD interest is generally taxed as ordinary income, and cites CPA Dat Ngo of Vetted Prop Firms on the timing: interest may be taxable in the year it is earned, even if the CD has not matured. The actual tax due depends on a saver’s circumstances and applicable rules; the provided source gives no after-tax estimate.
The Trade-Off Between Yield and Access
For someone holding a substantial cash balance, the reported estimate shows how a fixed-rate deposit can produce a defined return without exposure to market-price swings. That predictability may suit a saver with a known expense about 18 months away or someone seeking to set aside part of a portfolio, including near retirement. It does not make the CD appropriate for money that may be needed unexpectedly.
The central trade-off is certainty versus flexibility. A fixed APY protects the agreed rate if market rates fall, but the depositor cannot take advantage of a higher rate without potentially closing the CD early and facing a penalty. A shorter term could leave money available sooner for reinvestment, though the rate offered at maturity is unknown. The reported $6,825.38 is therefore a projected gross return under stated terms, not a guarantee that this is the best available choice or the highest return a saver could obtain.
Deposit insurance is another relevant consideration for large balances. Kiplinger notes that eligible deposits at FDIC-insured banks are generally covered up to $250,000 per depositor, per insured bank, per ownership category. Coverage depends on how accounts are held and other deposits at the same bank; readers should verify their circumstances rather than assume a single account balance determines coverage.
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How the Report Frames Rate Timing
Kiplinger’s article presents the 18-month offer amid uncertainty about future interest rates. It said the Federal Reserve was unlikely to move at its October meeting but that a December change remained possible, particularly if inflation stayed persistent. Those comments describe the outlook in the original report; they should not be treated as a current forecast, and the supplied material does not establish when the rate was checked.
The article described a shorter-term CD, ideally around six months, as one alternative for savers who wanted to revisit rates sooner. That approach can provide an earlier opportunity to reinvest, but it does not guarantee a higher APY later. Conversely, choosing a longer fixed term can preserve a stated rate for longer. The right comparison depends on when the money is needed, the available rates and each account’s withdrawal terms.
The source is a rate-and-earnings report, not confirmation that the offer remains open today. CD rates can change, and the available term, minimum deposit and conditions may differ when a customer applies. The $6,825.38 figure should be read as the article’s calculation for the particular rate and term it reported.
“With a CD, you typically owe income tax on interest in the year it’s earned — even if the term hasn’t matured yet.”
— Dat Ngo, CPA at Vetted Prop Firms, as quoted by Kiplinger
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Offer Terms and Final Returns
The source does not establish whether the 4.50% APY remains available, when it was last verified, or whether other eligibility conditions apply. It also does not provide the specific early-withdrawal penalty, compounding details or a full calculation method. Those details can affect the result and should be checked in the current account disclosures.
The reported earnings are not an after-tax figure, and each depositor’s tax liability varies. The source also cannot predict future CD rates, so it is unclear whether a shorter-term account would offer a better rate when it matures. No comparison rates for alternative terms are included in the supplied material.
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Check Current Rates Before Depositing
Anyone considering the account should confirm the current APY, minimum deposit, term and early-withdrawal penalty directly with the bank before opening it. They should also review how interest is credited and reported for tax purposes, and confirm whether their total deposits qualify for the desired FDIC coverage.
The decision then turns on the depositor’s time horizon: compare a fixed 18-month rate with shorter terms and accessible savings options, while accounting for the possibility that rates may change. The supplied report does not announce a later rate update or a Federal Reserve decision; any new offer or policy development would need to be checked separately.
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Key Questions
How much would $100,000 earn in the reported jumbo CD?
Kiplinger estimated $6,825.38 over 18 months at a 4.50% APY. That is a reported projection before taxes, based on the offer and assumptions described in the article.
Is the 4.50% APY still available?
The supplied source does not confirm current availability. Check Credit One Bank’s current rate and account disclosures before applying.
Can the depositor withdraw the money early?
Kiplinger says jumbo CDs may carry early-withdrawal penalties, but the source does not state the penalty for this specific account. Review the account terms before depositing money that may be needed early.
Are CD earnings taxable?
Kiplinger says CD interest is generally taxed as ordinary income. It also quotes CPA Dat Ngo saying interest may be taxable in the year earned, even before maturity. Individual tax treatment can vary.
Does FDIC insurance cover a $100,000 jumbo CD?
Kiplinger says eligible deposits at FDIC-insured banks are generally covered up to $250,000 per depositor, per insured bank, per ownership category. Other accounts and ownership arrangements can affect coverage, so verify the applicable limit for your deposits.
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