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Can you earn more with a CD or high-yield savings account right now?

If you’re looking for a safe and stable investment product, certificates of deposit (CDs) and high-yield savings accounts are two great options to consider. Both offer competitive rates compared to regular savings accounts, and both are protected by federal deposit insurance.

Which account is better for you depends on a number of factors, of which one of the biggest is how much interest you stand to earn. To make a more informed decision, it’s important to know where current CD and high-yield savings account rates stand.

See today’s top savings rates here.

Can you earn more with a CD or high-yield savings account right now?

Both CDs and high-yield savings accounts pay up to 10 times the national average savings rates (if not more). In a high-rate environment like we’re experiencing today, that makes them both an easy way to grow your savings faster. But which earns the highest returns right now?

As of September 7, 2023, the top high-yield savings accounts offer the following rates:

Milli Savings Account: 5.25% APYUFB High Yield Savings Account: 5.25% APYPopular Direct High-Rise Savings Account: 5.20% APYCIT Bank Platinum Savings Account: up to 5.05% APY

By comparison, today’s top CD rates are:

Connexus Credit Union: up to 5.76% APY (1-year term)LimeLight Bank: 5.50% APY (1-year term)Bread Savings: 5.50% APY (1-year term)Popular Direct: 5.50% APY (1-year term)

So, if you’re looking solely for the highest return on your savings, CDs are the better bet at present.

Compare accounts online now to find out how much you could be earning.

Other considerations

The interest rate is an important factor in deciding whether to open a CD or a high-yield savings account. But it isn’t the only factor. As you weigh your options, you should also consider the following.

When you’ll need your funds

Many CDs charge a penalty if you withdraw funds before the term is up. This can negate any additional earnings you may have accrued with a higher interest rate. If you want the flexibility to access your funds at any time — for instance, if they serve as an emergency fund — a high-yield savings account may be the better choice.

In addition, the top CD rates listed above are all for one-year CDs. If you want a different term, your rate could be significantly lower.

Minimum deposit requirements

To get some of the top rates listed above, you may need to deposit a certain amount when you open the account or maintain a certain balance each month. If you don’t have enough money to do so, you could be limited to accounts with a significantly lower APY.

Fixed vs. variable rate

CD rates are fixed when you open the account. That means if you open a CD when rates are high — as they are now — you’ll enjoy that high rate for the duration of the CD, even if overall interest rates go down. So, if you can afford to lock your money up for the full term, you could stand to earn more with a CD than a high-yield savings account.

In contrast, high-yield savings account rates are variable, meaning they rise and fall along with the federal funds rate. If rates go up, so will your earnings. However, if rates drop, your earning potential will drop too. Knowing where rates are currently heading can help you make a more informed decision.

Ready to find your next account? Check out your options here.

The bottom line

While today’s top CDs pay more than today’s top high-yield savings accounts, your earning potential depends on a number of factors, including how much money you have to deposit, when you’ll need to access that money and where interest rates are heading. By taking all these factors into account, you can find the best rate for your needs and goals.

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