CD's Are Paying 5.15%, but I'm Still Sticking With a Savings Account

Right now, I could buy a certificate of deposit (CD) and lock in a great rate. You could too. The Ascent's guide to the best CD rates show multiple CDs paying more than 5.00%, including some offering yields as high as 5.15%.

I'm not going to buy a CD, though. I'm sticking with my high-yield savings account. And you might want to do the same. Here's why.

Savings accounts are competitive with CDs right now

Normally, you can get a better rate by buying a CD than a savings account. That's not necessarily true right now, though.

The Ascent's list of the best high-yield savings accounts shows multiple savings accounts offering yields above 5.00%, too -- just like on the CD list. The big difference is, the highest available savings account yield available as of this writing is 5.26% from our curated list. That's actually higher than what a CD offers.

Our Picks for the Best High-Yield Savings Accounts of 2024

SoFi Checking and Savings APY up to 4.60% Rate info You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet. Min. to earn $0 Open Account for SoFi Checking and Savings Member FDIC.	APY up to 4.60% Rate info You can earn the maximum APY by having Direct Deposit (no minimum amount required) or by making $5,000 or more in Qualifying Deposits every 30 days. See SoFi Checking and Savings rate sheet at: https://www.sofi.com/legal/banking-rate-sheet.	Min. to earn $0
Synchrony Bank High Yield Savings APY 4.75% Rate info Our Disclosure: Annual Percentage Yields (APY) is subject to change at any time without notice. Offer applies to personal accounts only. Fees may reduce earnings. For High Yield Savings accounts, the rate may change after the account is opened. Visit synchronybank.com for current rates, terms and account requirements. Member FDIC Min. to earn $0 Open Account for Synchrony Bank High Yield Savings Member FDIC.	APY 4.75% Rate info Our Disclosure: Annual Percentage Yields (APY) is subject to change at any time without notice. Offer applies to personal accounts only. Fees may reduce earnings. For High Yield Savings accounts, the rate may change after the account is opened. Visit synchronybank.com for current rates, terms and account requirements. Member FDIC	Min. to earn $0
Capital One 360 Performance Savings APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings Member FDIC.	APY 4.25% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of April 11, 2024. Rates are subject to change at any time before or after account opening.	Min. to earn $0

I'm going to stick with using a savings account if I can get a better rate on it. Why? A savings account does not require me to agree to leave my money in the account -- while a CD does.

Why give up access to my own money and face a potential penalty to access cash when a savings account could pay more and won't require that kind of commitment?

CDs offer more protection against interest rate fluctuations -- but that might not matter much right now

Remember when I asked two seconds ago about why you'd opt for a CD and lock up your money when a savings account is offering a better yield? There's actually a situation where you might do that.

Savings accounts come with variable interest rates, while CD rates are fixed for the entire term. So, if a CD guaranteed you a great rate for a long time, it might be worth buying it -- even if a savings account offered a higher yield -- to ensure you kept that great rate if interest rates declined overall.

Right now, though, that's not reason enough to get me to buy a CD -- and it might not be a good reason for you to opt for a CD, either. Here's why.

The best yields on CDs (those 5.00% and up rates) are mostly available on certificates with a term of a year or less. So, you get some protection against fluctuating interest rates, but not much.

With inflation remaining stubbornly high and a growing number of experts coming around to the belief that rate cuts may not happen until 2025, there's no good reason to think savings account yields are going to decline dramatically anytime soon.

Sticking with savings could be the best move

Since I think I'll be able to keep my savings account rate for most of this year (if not longer) and that rate is higher than what CDs offer, it doesn't make sense to lock myself into a lower CD rate right now just to guarantee that rate will last six months to a year.

And unless you think rates are going to decline very soon, you may want to stick with savings too.

If your savings account isn't already paying upward of 5.00% APY, though, you should make a switch to one that is to take advantage of these yields as they are unprecedented in recent history. The Western Alliance Bank High-Yield Savings Premier account comes with no fees and a very high APR, so give it a look to see if it could work for you.