Forget CDs, Even With Rates Over 4%. Here's Where I'd Put My Money Now

Over the past few years, CD rates have been pretty enticing. Locking in a 4.00%+ APY sounds like a great way to grow your savings, especially with widely expected rate cuts coming soon.

But, some top high-yield savings accounts (HYSAs) have kept pace with those top CD rates. And while they're not "locked in," personally I think the flexibility of an HYSA trumps the extra interest you might make in a short-term CD.

I track CD and HYSA rates constantly. And so far, it's never made sense for me to tie up money in a CD.

HYSAs are my go-to for short-term savings

Right now, some of the top high-yield savings accounts are still offering 4.00% APY or more.

That's a tiny bit shy of the top CD rates right now around the ~4.25% APY range. But, with an HYSA your cash isn't locked up.

The trade-off of course is that HYSA rates can fluctuate. APYs can drop at any time, without warning.

But to me, HYSAs are still the better move. I'd rather earn 4.00% with full access to my funds than lock in 4.25% and pay a penalty if I need the cash early.

I keep my emergency fund and short-term savings (like money for travel, home repairs, or a new surfboard) in an HYSA. I can access it anytime, move it between accounts in a day or two, and earn great interest right now.

My long-term money goes straight into index funds

Since my high-yield savings account is already pretty full, most of my new savings in 2025 are going straight into long-term investments.

I keep things simple with low-cost index funds that track the S&P 500 or total stock market.

Investing can be scary with short-term ups and downs. But over time, the growth potential is massive. Historically, the stock market has delivered around 8% to 10% annual returns, which is way more than any CD or savings account can offer.

So that's where I'm keeping my money right now. Short-term savings in an HYSA, and anything long-term invested for retirement.

CDs aren't bad -- they're just not for me

To be fair, CDs are a good fit for some folks. If you know for sure that you won't need the money for the next 12, 24, or 36 months, a CD can provide a predictable, fixed return.

Some savers even use a CD laddering strategy, splitting up their cash across multiple CDs with different maturity dates. Not a bad plan to get some higher yields but also have some access to your cash.

I've actually considered a split with my own emergency fund. I could take my $25,000 and put, say, $10,000 into a 12-month CD, then keep the other $15,000 in an HYSA. That'd earn me a tiny bit more interest.

But honestly, it feels like splitting hairs. I'd rather keep it simple, keep all my cash in one place, and know I can get to it whenever I need.

Start saving smarter today -- see our top picks for HYSAs that pay 4.00%+ APY.