Yes. You would report the interest to the IRS when it is earned, and reported to you.
According to the IRS, if the interest earned during the tax year exceeds $10, you must report it on your tax return and pay taxes on it. 1 This reduces your return on the investment, so it's important to consider how CD interest is taxed in order to decide if placing your money in a CD is worth it.
Click here for detailed information on Form 1099-INT.
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