Right now, we’re in a rare window where both high-yield savings accounts (HYSAs) and certificates of deposit (CDs) are offering APYs over 4.00%. That’s nearly 400x what most big bank savings accounts still pay (seriously — some are stuck at 0.01%).
But things are changing. The Federal Reserve is expected to cut rates very soon, and when that happens, we’ll be saying bye bye to today’s high rates.
As someone who tracks APYs for a living, I can tell you: now is the time to make a move.
What to know about high-yield savings accounts
A high-yield savings account (HYSA) works just like a regular savings account. But it pays significantly more interest.
Some top online banks are paying right around 4.00% APY, and you can access your money at any time.
Full disclosure: I’m an HYSA fan myself. Here’s why others love them too:
- Liquid and flexible: You can move money in and out without penalty, any time.
- They’re safe: Banks are typically FDIC-insured up to $250,000, per person, per account ownership category.
- No or low fees: Junk fees are a pet peeve of mine. But many online banks don’t charge any, which is nice!
HYSAs are great for emergency funds, travel savings, and short-term goals. Basically any money you want to grow but still keep handy.
A great option to check out right now is the SoFi Checking and Savings (Member FDIC) account, which has a top-tier APY and no account fees. Read our full review here and see if it’s right for you.
What to know about CDs
A fixed rate can be a major win if and when the Fed starts cutting rates. You’ll continue earning today’s peak APY while new CDs drop lower.
Of course, the tradeoff is that your money is locked while earning that rate. And there are penalty fees for early withdrawals.
HYSA vs. CD: Which one should you pick?
It’s tempting to think there’s only one perfect fit for your money.
But the truth is, you can choose both! In fact, most people do well with a combo approach, assigning portions of their money to different goals.
- Use an HYSA for cash you might need to access soon. This would be like your emergency fund, travel savings, or big expenses in the near horizon.
- Use a CD for money you can set aside for a while. Things like your future tax bill, next summer’s wedding, or a big purchase you’re planning months ahead.
This way, you’re earning a solid return without sacrificing flexibility.
If you’re still unsure, start small. Just move a portion of your cash into each and see how it feels.
Most CDs have low minimums, and shorter terms available.
Need help choosing? Our experts compared dozens of options to find the best CDs available now. Check out our top picks here and lock in 4.00%+ rates while you still can.