The Overlooked 4-Year Term
Almost everyone compares 3-year and 5-year CDs and skips the 48-month option sitting between them. That inattention sometimes creates opportunity: banks occasionally price 4-year CDs at nearly the 5-year rate, giving you 80% of the commitment for essentially the same yield. It's always worth a look before defaulting to five years.
What Can You Earn in 4 Years?
A $10,000 deposit at 4.30% APY compounds to about $11,834 — roughly $1,834 in interest. Compare that with simple interest ($430 × 4 = $1,720): compounding adds over $100 on its own. Larger deposits scale proportionally; exact numbers in the calculator above.
Who Should Consider 4 Years
- Rate-lockers: if today's rates look good historically, four years of guarantee is meaningful protection against a low-rate future.
- Ladder builders: the 4-year rung is essential to the classic 5-rung ladder — map yours with the CD Ladder Calculator.
- IRA savers: long CDs pair well with retirement accounts where the money is already committed — see the tax math in our IRA CD Calculator.
The Long-Lock Caveats
Four years is a long time: penalties typically run 12 months of interest, and inflation risk is real — if prices rise faster than your APY, your real return shrinks. Long CDs are for money whose job is safety, not growth.