Advertiser Disclosure
Many of the offers that appear on this site are from companies from which The Motley Fool receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear) and may influence which products we write about, but our product ratings are not influenced by compensation. We do not include all companies or offers available in the marketplace.
Brooklyn leads the content team behind product reviews and ratings at Motley Fool Money, ensuring readers get well-researched, expert-backed insights to make smarter financial decisions. With nearly seven years working full-time in financial content -- four of them at The Motley Fool -- she has developed a deep passion for personal finance, from investing strategies to everyday money management. Her financial goals include buying a house and planning as many trips as her budget allows. In her free time, you’ll likely find her listening to a pop culture podcast or telling anyone who will listen to get a high-yield savings account.
Many or all of the products here are from our partners that compensate us. It’s how we make money. But our editorial integrity ensures that our product ratings are not influenced by compensation.
APY = Annual Percentage Yield.
I've had both a high-yield savings account (HYSA) and a certificate of deposit (CD) for a few years now. But I love them for different reasons, and I use them for different purposes.
I park my emergency fund and short-term savings I might need to access quickly in my high-yield savings account. My certificate of deposit, on the other hand, is where I stash cash I know I won't need for a while. In fact, my 10-month CD is just about to mature. It earns a higher rate, and I'm not tempted to dip into it.
If you're trying to decide between the two, I'll break down how they compare and how to know which one fits your goals.
What's a high-yield savings account?
A high-yield savings account is a savings account that earns a much higher interest rate than traditional bank accounts. Its best trait is flexibility: You can deposit or withdraw funds anytime, and many accounts come with no monthly fees.
Why I use it: I like the peace of mind that I can access my money whenever I want, but I still earn interest while it sits. It's less risky than investing the money and earns so much more interest than a regular savings account.
Compare savings rates
Make sure you're getting the best account for you by comparing savings rates and promotions. Here are some of our favorite high-yield savings accounts to consider.
4.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
3.60%
Rate info
3.60% annual percentage yield as of June 17, 2025. Terms apply.
4.50/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
up to 3.80%
Rate info
SoFi members who enroll in SoFi Plus with Eligible Direct Deposit or by paying the SoFi Plus Subscription Fee every 30 days or SoFi members with $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 3.80% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Eligible Direct Deposit amount required to qualify for the stated interest rate. Members without either SoFi Plus or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.00% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 1/24/25. There is no minimum balance requirement. If you have satisfied Eligible Direct Deposit requirements for our highest APY but do not see 3.80% APY on your APY Details page the day after your Eligible Direct Deposit arrives, please contact us at 855-456-7634. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet. See the SoFi Plus Terms and Conditions at https://www.sofi.com/terms-of-use/#plus.
Min. to earn: $0
Earn up to $300 bonus with direct deposit.
Plus, new customers earn an extra 0.20% APY on savings for up to 6 months with direct deposit (terms apply) — that equals up to 4.00% APY!
Earn up to 4.00% Annual Percentage Yield (APY) on SoFi Savings with a 0.20% APY Boost (added to the 3.80% APY as of 6/10/25) for up to 6 months. Open a new SoFi Checking & Savings account and enroll in SoFi Plus by 6/24/25. Rates variable, subject to change. Terms apply at sofi.com/banking#2. SoFi Bank, N.A. Member FDIC.
5.00/5
Our ratings are based on a 5 star scale.
5 stars equals Best.
4 stars equals Excellent.
3 stars equals Good.
2 stars equals Fair.
1 star equals Poor.
We want your money to work harder for you. Which is why our ratings are biased toward offers that deliver versatility while cutting out-of-pocket costs. = Best = Excellent = Good = Fair = Poor
See Terms
Rate info
Balances less than $250,000 earn See Terms, and balances greater than $250,000 earn See Terms.
A certificate of deposit locks your money in for a set amount of time -- usually anywhere from 6 months to 5 years. In exchange, you get a guaranteed interest rate that typically beats what HYSAs offer (I locked in a 5.20% APY in my CD while my HYSA dropped to 4.40% APY). The catch is that you'll pay a penalty if you withdraw the money early.
What it's good for:
Savings you won't need for a while
Earning a higher return on idle cash
Avoiding the temptation to spend
Why I use it: I like using CDs for savings goals that are six to 12 months out -- like a future move or big home project. I know I won't touch the money, so I might as well earn more on it.
HYSA and CD rates don't just come out of nowhere -- they're tied to what's happening in the broader economy, especially interest rate decisions made by the Federal Reserve.
When the Fed raises rates to fight inflation, banks usually respond by offering higher APYs on savings accounts and CDs.
That said, banks also set rates based on their own priorities. Some offer higher HYSA rates to attract new customers. Others bump up CD rates when they want to lock in deposits. So even when Fed rates hold steady, you might still see some movement -- especially if you're watching online banks or credit unions, which tend to offer better yields than brick-and-mortar banks.
Bottom line: Rates can change at any time, but they're generally higher when the Fed is trying to cool down the economy. If you see a good offer, it's worth locking it in -- especially with a CD.
CD vs. HYSA: Side-by-side comparison
Feature
High-Yield Savings Account
Certificate of Deposit
Interest rate
Competitive, but variable
Often higher, and fixed
Access to funds
Anytime
Locked in for a term
Withdrawal penalties
None
Usually applies
FDIC insured
Yes
Yes
Best for
Flexible savings
Committed savings
Note: Both HYSAs and CDs are FDIC insured up to $250,000 per depositor. That means your money is protected even if the bank fails.
Don't forget about taxes
Whether you're earning interest on a CD or a HYSA, the IRS still wants a cut. You'll owe income tax on the interest you earn -- even if you don't withdraw it. It's usually reported on a 1099-INT form at tax time.
Can you lose money in a CD or HYSA?
Nope, that's the beauty of both of these savings strategies. As long as you stay under the FDIC insurance limit ($250,000 per bank, per person), your money's safe. These are both low-risk ways to grow your savings.
How to choose between a CD and HYSA
If you're not sure which account to open, ask yourself one question: Will I need to access this money in the next six to 12 months?
If yes, go with a high-yield savings account. You'll earn interest without tying your hands.
If no, a CD could earn you more. Just be sure to get one for a term that makes sense for you.
When it makes sense to have both
Honestly, I think having both a HYSA and a CD is one of the smartest money moves you can make, and that's exactly what I do.
A high-yield savings account gives you the flexibility to cover surprise expenses or move quickly on last-minute plans (like when I found a flight deal I couldn't pass up). But a CD helps you earn more on money you don't need right away -- and keeps it out of sight, out of mind.
It makes sense to have both if:
You want a clear separation between short- and long-term savings
You're trying to resist the urge to dip into certain funds
You want to earn more without taking on any market risk
You've already got your emergency fund covered and are looking for your next best savings move
For me, the combo gives structure to my savings. My HYSA is for flexibility; my CD is for focus. And together, they help me make the most of my money.
Final thoughts
There's no one-size-fits-all answer here. Both HYSAs and CDs are smart, low-risk places to grow your money. It just depends on how hands-off you want to be -- and how soon you might need your cash.
Personally, I like the balance of having both: quick access when I need it, and better returns when I don't.
If you're thinking about opening an account, we've rounded up the best high-yield savings accounts and top-paying CDs available today. Compare rates, terms, and features to find the right fit for your goals.
FAQs
Not necessarily -- it just depends on your goals. CDs usually pay more, but you'll have to lock in your money. HYSAs are better if you want flexibility.
You'll usually pay a penalty, like a few months' worth of interest. That's why I only use CDs for cash I know I won't need until later.
You could, but you might miss out on strong rates now. I'd rather lock in a solid return today than gamble on what the Fed might do next.
Share This Page
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. Motley Fool Money is 100% owned and operated by The Motley Fool. Our knowledgeable team of personal finance editors and analysts are employed by The Motley Fool and held to the same set of publishing standards and editorial integrity while maintaining professional separation from the analysts and editors on other Motley Fool brands.
Terms may apply to offers listed on this page.
APYs are subject to change at any time without notice.
Synchrony Financial is an advertising partner of Motley Fool Money. Ally is an advertising partner of Motley Fool Money. Brooklyn Welch has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Goldman Sachs Group. The Motley Fool has a disclosure policy.
Motley Fool Money is a Motley Fool service that rates and reviews essential products for your everyday money matters.
