Key Takeaways
- A hot stock like Nvidia Corp. (NVDA) can climb quickly, offering significant profit potential, but it also carries a risk of sharp drops.
- Certificates of deposit (CDs) may be less exciting, but they provide guaranteed, predictable growth.
- Right now, the top CDs pay 4.50%—enough to turn $10,000 into $10,450 in one year.
- The right choice depends on what you value more: higher growth potential or greater peace of mind.
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A Hot Stock Can Deliver Big Gains—But Also Big Losses
It’s easy to see the appeal of investing in a stock making headlines. Nvidia has gained 36% this year (as of Aug. 12) and is trading at roughly 15 times its price from five years ago. Hearing about early investors who made huge profits can make it feel like you need to jump in before the opportunity’s gone.
But while a soaring share price can be exciting, stocks don’t just move up—they can also fall, sometimes sharply. While the risk of loss exists across the entire stock market, even when invested in a broad index fund, it’s amplified when your money is in a single stock. A sudden downturn in the company’s fortunes or overall market sentiment can quickly erase recent gains, leaving you with less than you started with.
Nvidia’s ride has been anything but smooth, and putting your entire $10,000 into a single hot stock is a high-stakes gamble not just on the company’s management but also the AI sector growth its earnings have depended on. The company also faces major competitive pressures: Advanced Micro Devices Inc.’s (AMD) latest MI350 series chips have tested well compared with Nvidia, while major tech companies like OpenAI and Microsoft are developing custom AI chips to reduce their dependence on the company. The company also confronts geopolitical risks from Chinese regulatory scrutiny and U.S.-China trade tensions.
If you’re comfortable with the risk—and it’s money you can afford to lose—there’s nothing wrong with making that bet. But for money tied to short-term financial goals, the potential for loss can make it an ill-advised choice. That’s why some investors turn to safer options that may offer smaller returns but eliminate the risk of losing money.
| $10,000 in Nvidia vs. a Top CD: Potential Outcomes | ||
|---|---|---|
| Funds after 1 year | Gain or loss | |
| Nvidia with a 20% loss | $8,000 | – $2,000 |
| Nvidia with a 10% loss | $9,000 | – $1,000 |
| Nvidia with a 5% loss | $9,500 | – $500 |
| Nvidia with no gain | $10,000 | + $0 |
| 4.50% CD | $10,450 | + $450 |
| Nvidia with a 5% gain | $10,500 | + $500 |
| Nvidia with a 10% gain | $11,000 | + $1,000 |
| Nvidia with a 20% gain | $12,000 | + $2,000 |
A 4.50% CD Offers Modest—But Guaranteed—Growth
If you need your money to grow steadily or want to avoid the stress of stock market swings, a top-paying, federally insured certificate of deposit (CD) offers strong protection. Thanks to today’s higher interest rates, you can lock in a guaranteed return of 4.50% APY for terms ranging from six to 21 months.
Though yields in the mid-4% range are more modest than the potential gains from investing in Nvidia, putting your $10,000 in a CD means you’ll know exactly how much you’ll earn over the term. And if you choose a CD from a Federal Deposit Insurance Corporation (FDIC)-insured bank or an NCUA-insured credit union, your deposit is federally protected up to $250,000 per person, per institution.
Of course, even today’s best CDs won’t deliver the outsized returns a stock can produce in a bull market. But for many savers, the appeal lies in knowing their money will only grow—not shrink—and in having a predictable payout they can count on when the CD matures. For those looking to avoid market volatility, that peace of mind can be worth more than the chance of hitting it big.
Which Approach Fits Your Financial Goals and Timeline?
Choosing between an individual stock and a CD depends on your risk tolerance, financial goals, and how long you can keep the money untouched. If the $10,000 is money you won’t need for years, buying Nvidia shares could be worthwhile, provided you’re comfortable with potential losses.
If, on the other hand, you’re saving for a house and this $10,000 is critical to making a down payment in a year or two, risking that it could shrink may not be wise. Any situation in which you’ll need the full amount soon is better suited to safe, reliable strategies.
It also matters how much you have available to save. If $10,000 is just a small portion of your invested funds, you’re better positioned to weather a stock loss if it occurs. But if it’s the bulk of your savings, you’re likely better off keeping it protected with a safer option.
An individual stock and a certificate of deposit are wildly different ways to put your money to work, but each can have a place in a well-rounded plan. The right choice depends on your priorities—whether you’re chasing potential growth or ensuring your money is there when you need it.
Daily Rankings of the Best CDs and Savings Accounts
We update these rankings every business day to give you the best deposit rates available:
Important
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This can be very different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often five, 10, or even 15 times higher.
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that’s below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.