Why I’m Choosing High-Yield Savings Accounts Over CDs Right Now

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[[{“value”:”Image source: The Motley Fool/Upsplash
With interest rates so high, CDs (certificates of deposit) have been all the rage for the last couple of years. Even with rates dropping this year, CDs are still getting a lot of buzz — and for good reason.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. If you want a low-risk, good-reward place to park some money and let it grow, you really can’t go wrong with a CD. Click here to check out our favorite CDs for rates over 4% APY.As great as they are, however, CDs do have one big drawback — and that drawback is why I’m sticking with my trusty high-yield savings accounts.I don’t want to lock up my savingsMy main pain point with CDs is that most have steep penalties if you withdraw your money before the CD matures. This essentially locks up your cash for the life of the CD.You can pick the maturity term when you choose which CD to open. But once you open that CD and deposit your money, you really need to leave it alone until that term ends and the CD matures.If you withdraw your money before the CD matures, you could be faced with some big fees. Not only can these fees eat up the interest you’ve earned, but some banks will even take part of your principal if the fee is more than you’ve earned in interest to that point.I can still get competitive APYsThe reason we love CDs despite this drawback is that you aren’t just locking up your investment — you’re also locking in your interest rate. Given the good odds that the Fed will continue to cut rates over the next few months, locking in higher rates now can be a big win.However, my current savings situation means I value having liquidity (quick, easy, low-cost access to my money) over a guaranteed rate. That’s why I’m currently leaving my money in my savings accounts instead of picking up a CD.That doesn’t mean I’ve necessarily sacrificed a lot of interest earrings, however. I can still find APYs of 4% and up from the top high-yield savings accounts.If rates drop, I can account hopAnother benefit of having my money accessible at all times is that I can take advantage of promo rates and new account bonuses. Whenever I see a great deal, I can just move my cash to a new bank as needed.For example, some banks will offer promotional APYs for new savings accounts. I can move my money over until the promo rate runs out, then move it to the next best deal.Similarly, many banks will offer cash bonuses for opening a new checking or saving account. You can earn up to $400 from our top-rated bank bonuses.A CD can be an excellent tool for helping your money grow, but it isn’t the right tool for every job. Sometimes a high-yield savings account — or even a new checking account with a bonus — may be the better call.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

With interest rates so high, CDs (certificates of deposit) have been all the rage for the last couple of years. Even with rates dropping this year, CDs are still getting a lot of buzz — and for good reason.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

If you want a low-risk, good-reward place to park some money and let it grow, you really can’t go wrong with a CD. Click here to check out our favorite CDs for rates over 4% APY.

As great as they are, however, CDs do have one big drawback — and that drawback is why I’m sticking with my trusty high-yield savings accounts.

I don’t want to lock up my savings

My main pain point with CDs is that most have steep penalties if you withdraw your money before the CD matures. This essentially locks up your cash for the life of the CD.

You can pick the maturity term when you choose which CD to open. But once you open that CD and deposit your money, you really need to leave it alone until that term ends and the CD matures.

If you withdraw your money before the CD matures, you could be faced with some big fees. Not only can these fees eat up the interest you’ve earned, but some banks will even take part of your principal if the fee is more than you’ve earned in interest to that point.

I can still get competitive APYs

The reason we love CDs despite this drawback is that you aren’t just locking up your investment — you’re also locking in your interest rate. Given the good odds that the Fed will continue to cut rates over the next few months, locking in higher rates now can be a big win.

However, my current savings situation means I value having liquidity (quick, easy, low-cost access to my money) over a guaranteed rate. That’s why I’m currently leaving my money in my savings accounts instead of picking up a CD.

That doesn’t mean I’ve necessarily sacrificed a lot of interest earrings, however. I can still find APYs of 4% and up from the top high-yield savings accounts.

If rates drop, I can account hop

Another benefit of having my money accessible at all times is that I can take advantage of promo rates and new account bonuses. Whenever I see a great deal, I can just move my cash to a new bank as needed.

For example, some banks will offer promotional APYs for new savings accounts. I can move my money over until the promo rate runs out, then move it to the next best deal.

Similarly, many banks will offer cash bonuses for opening a new checking or saving account. You can earn up to $400 from our top-rated bank bonuses.

A CD can be an excellent tool for helping your money grow, but it isn’t the right tool for every job. Sometimes a high-yield savings account — or even a new checking account with a bonus — may be the better call.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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