You Can Now Open a 100-Year CD. But Should You?

With savings rates as high as they are, you’ve probably considered locking up your cash in a CD account for an extended period of time, say five years. But what about locking your cash away for a full century? With Walden Mutual Bank, you can now open a 100-year CD with a pretty solid savings rate of 4.75%. You’ll earn quite a lot in interest once the CD matures, but that’s more than a lifetime of waiting. Here’s what you need to know about the 100-year CD account, the first of its kind. 

100-year CD

Based in Concord, New Hampshire, Walden Mutual Bank is the first mutual bank to launch in the U.S. in 50 years and is 100% mission-aligned to farms, food businesses, non-profits and other sustainable businesses. The bank uses deposits to fund loans to what it calls mission-driven organizations in the New England region. 

Walden Mutual Bank's Local Impact CDs range from maturities of three months all the way to 100 years. The 100-year CD has a minimum opening deposit of $1,000, a maximum deposit of $150,000 and earns an APY of 4.75%. The CD is designed for individuals who want to pass on assets to a charity or future generation and is advertised as a good addition to a donor-advised fund, part of a charitable giving strategy or a trust. To open an account, you’ll be asked to name a beneficiary — which you’ll need, unless you plan on living for at least 100 more years or plan on withdrawing funds early. Which you can do at any time, but subject to a penalty of 10 years' interest.

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How much can you earn on a 100-year CD?

Even just investing the minimum deposit amount of $1,000 will leave you with over 100k after the end of 100 years, thanks to compounding interest. Here’s a look at how much you’d have once your CD matures, depending on the amount of your initial deposit.  

$1,000 deposit (minimum)
Earnings: $102,610.36
Total: $103,610.36

$5,000 deposit
Earnings: $513,051.78
Total: $518,051.78

$10,000 deposit
Earnings: $1,026,103.56
Total: $1,036,103.56

$50,000 deposit
Earnings: $5,130,517.78
Total: $5,180,517.78

$100,000 deposit
Earnings: $10,261,035.55
Total: $10,361,035.55

$150,000 deposit (maximum)
Earnings: $15,391,553.33
Total: $15,541,553.33 

Pros and cons of a 100-year CD

While you can earn several million dollars in interest over the course of 100 years with a CD account from Walden Mutual Bank, you’ll also want to consider the potential drawbacks. For starters, you could potentially earn much more over time by investing in stocks or mutual funds instead of a CD account. The S&P 500 Index has a historic annualized average return of around 10.26% since its inception, for example. Another thing to consider is whether or not your savings rate will keep pace with inflation. If not, the purchasing power of your savings could decrease. A drawback to all CDs, of course, is the lack of liquidity they offer. In this case, you won’t be able to access your funds for 100 years without incurring a penalty.

Taylor Kovar, Founder & CEO of 11 Financial told Bankrate that "better alternatives to a 100-year CD may include a diversified investment portfolio specific to an investor’s risk tolerance and financial goals," which can include "stocks, bonds, real estate and other assets that offer potentially higher returns and greater liquidity."

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