Why I’m Putting My $25,000 in an HYSA Instead of a CD

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A friend of mine just bought a 12-month certificate of deposit (CD), bragging that he locked in a killer 4.65% interest rate. And while that’s cool for him and his situation, I won’t be putting any of my $25,000 cash pile into CDs anytime soon.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
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Click here to read our full review for free and apply in just 2 minutes. All my cash is parked in a high-yield savings account (HYSA) instead. And even though I could probably earn higher interest with a CD, I value flexibility right now. I want immediate access to my cash savings during this strange and uncertain year.Right now I have about $25,000 sitting in cash, and here’s what my plans are in 2025.My main gripe with CDs right nowMy biggest irk about CDs is having to lock in my money. Sure, CDs do pay a small premium over savings accounts for this reason. But why lock up my cash for a fixed term when the upside is so small?Here’s what I mean…Right now I’m getting a 4.50% return on my cash in my HYSA.A 12-month CD might offer me ~4.65% at today’s rates, which is great. But that’s only a difference of 0.15 of a percentage point.Over a full year, that translates to only a ~$40 increase in interest if I went with a CD.Long story short, I am happily giving up the small potential boost of $40 to keep my money accessible all year. Flexibility means more to me than that tiny bit of interest.Other reasons I like HYSAsAside from solid interest rates, here are a few more features I love about HYSAs:FDIC insurance for peace of mindEasy transfers to and from your checking accountLow or no account minimumsMany online banks offer no monthly maintenance feesClick here to compare the top high-yield savings accounts and see which one stand to earn your money the most.Why I’m keeping over $25,000 in cashThere are two big reasons why I’m keeping a lot of money in savings — and you may want to as well.Emergency fund: For my e-fund, I like to keep three to four months’ worth of living expenses set aside. It protects me against job loss and bigger disasters. Right now, that’s about $20,000 of my HYSA.Sinking funds: For my shorter-term savings goals, I also stash money in my HYSA. Later this year I’m planning a big family trip to Australia, which will likely cost around $10,000 to $15,000. So I’m slowly saving up for that.Keeping all this cash in an HYSA means it’s earning maximum interest, and I’m not at risk losing any of it investing in the market. To start earning potentially hundreds of dollars a year, move your cash to one of these top high-yield savings accounts available today.Where I’m putting the rest of my money in 2025I’m not blind to the fact that the market is yoyo-ing right now. 2025 is actually shaping up to be a great opportunity to invest while the market is down!Not gonna lie — I have half a mind to dump all my available cash in the stock market right now, knowing that if I wait long enough I’ll make way more money than having it sit in a HYSA.But again, flexibility means more to me than earning potential. I know better than to have zero emergency savings. A disaster could come out of nowhere and put me (and my family) in a tricky situation with no available cash.So here’s my plan for 2025: Any savings over and above my e-fund I plan to invest in my brokerage account for the long term.Final thoughtsCDs are a great fit for some people. Right now they look like a safe bet because they can guarantee a solid return on your money during weird economic times.But for me, the current interest rates on HYSAs make more sense. Locking up my money doesn’t make sense because I may need immediate access to my cash at any time.What’s your take? Are you team CD or team HYSA right now?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.Citigroup is an advertising partner of Motley Fool Money. Joe O’Leary has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

A friend of mine just bought a 12-month certificate of deposit (CD), bragging that he locked in a killer 4.65% interest rate. And while that’s cool for him and his situation, I won’t be putting any of my $25,000 cash pile into CDs anytime soon.

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.

All my cash is parked in a high-yield savings account (HYSA) instead. And even though I could probably earn higher interest with a CD, I value flexibility right now. I want immediate access to my cash savings during this strange and uncertain year.

Right now I have about $25,000 sitting in cash, and here’s what my plans are in 2025.

My main gripe with CDs right now

My biggest irk about CDs is having to lock in my money. Sure, CDs do pay a small premium over savings accounts for this reason. But why lock up my cash for a fixed term when the upside is so small?

Here’s what I mean…

• Right now I’m getting a 4.50% return on my cash in my HYSA.
• A 12-month CD might offer me ~4.65% at today’s rates, which is great. But that’s only a difference of 0.15 of a percentage point.
• Over a full year, that translates to only a ~$40 increase in interest if I went with a CD.

Long story short, I am happily giving up the small potential boost of $40 to keep my money accessible all year. Flexibility means more to me than that tiny bit of interest.

Why I’m keeping over $25,000 in cash

There are two big reasons why I’m keeping a lot of money in savings — and you may want to as well.

• Emergency fund: For my e-fund, I like to keep three to four months’ worth of living expenses set aside. It protects me against job loss and bigger disasters. Right now, that’s about $20,000 of my HYSA.
• Sinking funds: For my shorter-term savings goals, I also stash money in my HYSA. Later this year I’m planning a big family trip to Australia, which will likely cost around $10,000 to $15,000. So I’m slowly saving up for that.

Keeping all this cash in an HYSA means it’s earning maximum interest, and I’m not at risk losing any of it investing in the market. To start earning potentially hundreds of dollars a year, move your cash to one of these top high-yield savings accounts available today.

Where I’m putting the rest of my money in 2025

I’m not blind to the fact that the market is yoyo-ing right now. 2025 is actually shaping up to be a great opportunity to invest while the market is down!

Not gonna lie — I have half a mind to dump all my available cash in the stock market right now, knowing that if I wait long enough I’ll make way more money than having it sit in a HYSA.

But again, flexibility means more to me than earning potential. I know better than to have zero emergency savings. A disaster could come out of nowhere and put me (and my family) in a tricky situation with no available cash.

So here’s my plan for 2025: Any savings over and above my e-fund I plan to invest in my brokerage account for the long term.

Final thoughts

CDs are a great fit for some people. Right now they look like a safe bet because they can guarantee a solid return on your money during weird economic times.

But for me, the current interest rates on HYSAs make more sense. Locking up my money doesn’t make sense because I may need immediate access to my cash at any time.

What’s your take? Are you team CD or team HYSA right now?

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.Citigroup is an advertising partner of Motley Fool Money. Joe O’Leary has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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