6-Month vs. 5-Year CDs: What's Best for Your Money Now?

CDs are built for times like this. With the Fed officially cutting rates in September (and signaling more cuts on the horizon through 2027), locking in guaranteed returns can feel like a safe harbor.

The tricky part is deciding how long to commit your money.

Let's break down the pros and cons of 6-month and 5-year CD options, plus a third route that might fit better if you want both growth and flexibility.

Rate comparison: 6-month vs. 5-year CDs

Here's a snapshot of the best CD rates in late September 2025:

• Top 6-month CD: around 3.75% APY
• Top 5-year CD: 3.60% APY

That means a $10,000 deposit in a 6-month CD earns about $186 by maturity. The same $10,000 in a 5-year CD grows to about $1,934 over the full term.

When a 6-month CD makes sense

Short-term CDs give you flexibility. Your money is tied up for only half a year, so you can quickly pivot if rates change or you find a better opportunity.

The catch is with more Fed rates likely coming soon, you may not see a great renewal rate in early 2026 when your maturity date comes.

A 6-month CD could be the right move if you:

• Expect to need your money within the next year
• Want to grab one of today's top short-term rates
• Think rates might bounce back in the near term

Compare today's best 6-month CDs and see how much interest you could earn before rates dip further.

When a 5-year CD makes sense

If you don't need the cash anytime soon, a 5-year CD can give you peace of mind. You'll lock in a steady rate today and keep it -- even if CDs drop sharply over the next few years.

Of course, you're committing for the long haul. Pulling money early usually means a penalty that cuts into your earnings.

A 5-year CD might be a fit if you:

• Have savings you won't touch until at least 2030
• Prefer predictable, fixed returns
• Believe rates will keep falling through 2026 and beyond

Don't neglect high-yield savings accounts

If you're not ready to commit for any CD term, a high-yield savings account (HYSA) might hit the sweet spot.

Today's top HYSAs are paying 3.50% to 4.20% APY, with some limited-time offers still pushing even higher. You get competitive yields and penalty-free access to your money anytime.

Yes, rates can change overnight. But while you're weighing your next move, an HYSA lets your money grow without locking you in.

Bottom line: Whether you lock in with a CD or stay flexible with an HYSA, the key is making your money work harder while rates are still this high.