Here's Why I Wouldn't Put $50,000 in CDs
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I get why CDs are appealing. They're safe, predictable, and don't play games with your money.
But if I had $50,000 sitting in cash right now, I wouldn't lock it up in CDs unless I had a super specific reason.
I'm not saying CDs are bad. They've got their place. But for most Americans trying to grow wealth and save more, there are better options out there.
Here's why I'm skipping CDs, and where I'd stash my $50K instead.
CDs aren't liquid enough for emergencies
When you open a CD, you're basically telling the bank, "Hold onto this money for a while -- I won't touch it." And in return, they give you a fixed interest rate for a set term.
If you break the deal and pull the money out early, you'll get hit with a penalty. Sometimes that's a few months' worth of interest. Sometimes more.
CDs might be fine if you're saving for a wedding next summer or a down payment in a couple years. Any goal with a specific end date is fine.
But life's full of curveballs. If your roof leaks or your car suddenly needs a new transmission, you don't want your cash stuck in a time-locked vault. You need instant access -- no penalties, no scrambling.
That's where high-yield savings accounts are a better fit. Right now, you can earn around 4.00% APY (or even more) from top online banks, without locking up your money. Check out my favorite high-yield savings accounts here to see which ones offer the best rates and perks.
CDs are too slow for long-term goals
If you're already retired or sitting on more money than you need, CDs can be great for preserving wealth.
But if you're still building wealth (most of us), they're just not aggressive enough.
Today's best CDs earn around 4.00% APY. That's really good. But historically, the S&P 500 has returned closer to 10% per year. That's more than double -- and over time, that gap becomes a canyon.
Here's a quick look at what $50,000 could turn into over 20 or 30 years:
| Investment Type | 20-Year Value | 30-Year Value |
|---|---|---|
| CDs (4% growth rate) | $109,556 | $162,169 |
| Index fund (10% growth) | $336,375 | $872,470 |
This shows why it's essential for younger folks with longer time horizons to prioritize long-term investing over short-term preservation.
Sure, the stock market has ups and downs. But if your time horizon is 10 years or longer, history shows that investing in stocks tends to reward patience.
Where I'd actually put $50K
For short-term needs: High-yield savings
If the goal is to keep money safe and ready for emergencies, a high-yield savings account (HYSA) is the move. You get similar returns to CDs, but your money stays liquid.
Right now, the LendingClub LevelUp Savings account is one of my top picks. You can earn 4.00% APY with $250+ in monthly deposits.
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- Competitive APY
- No fees
- Easy ATM access
- Unlimited number of external transfers (up to daily transaction limits)
- Requires you to make monthly deposits to earn the best APY
- ACH outbound transfers limited to $10,000 per day for some accounts
- No branch access; online only
The LendingClub LevelUp Savings account has a lot to offer. At the top of the list is its high APY, though you must deposit monthly to earn the best rate. Next is zero account fees, a strong and straightforward perk. Finally, you get a free ATM card, which you can use to withdraw from thousands of ATMs nationwide. Interested? You can open an account with $0.
No early withdrawal penalties. No waiting games. Just fast access and solid growth.
For long-term goals: IRA or brokerage account
If the money's not earmarked for something soon, I'd invest it for the long haul. Either in an IRA (for the tax benefits) or a regular brokerage account works.
Personally, I invest most of my money in low-cost index funds. They're simple, diversified, and historically strong performers.
Most major brokerages make it super easy to open both an IRA and a brokerage account under one roof. That way, you can manage everything in one place.
Why CDs don't fit my plan (right now)
Someday, CDs might come into my plan. Maybe when I'm closer to retirement and want to lock in some guaranteed returns.
But right now, I'm still in growth mode. I want the bulk of my money working as hard as possible in long-term investments. And my emergency cash kept liquid so I can solve money problems quickly without touching my long-term savings.
If you're in a similar spot -- still working, still growing wealth -- then your $50,000 probably shouldn't be in CDs either.
Our Research Expert
Joel O’Leary is a full-time Personal Finance Writer at Motley Fool Money, covering credit cards, bank accounts, investing, mortgages, and other personal finance topics. Joel has been writing about personal finance since 2018, previously leading editorial content for the How To Money podcast and serving as a resident writer at Budgets Are Sexy. He bought his first rental property at age 18, funding the down payment with savings from his high school job at McDonald’s -- a testament to his lifelong passion for smart money decisions. His work aims to make personal finance accessible and actionable for everyday readers. When he’s not writing, Joel enjoys surfing and spending time with his family.
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