$10,000 9-month CD vs. $10,000 high-yield savings account: Which will earn more by 2027?
Interest rates on both account types remain high. But will the returns look much different over the next nine months?
When weighing the potential earnings from a 9-month CD versus a high-yield savings account for a $10,000 deposit, it's important to consider the interest rates, flexibility, and risk factors involved. Both options currently offer an interest rate of around 4.10%, resulting in an approximate earning of $305.95 for the nine-month period ending in May 2027.
While the CD provides a fixed rate and guarantees the return, it also limits access to the funds until maturity. Conversely, the high-yield savings account allows for flexibility and easier access to funds, but its variable interest rate could change over time, potentially increasing or decreasing the earnings.
Given the current rate environment and the likelihood of rate adjustments in the future, splitting the funds between both accounts might prove to be the most prudent strategy. By doing so, you can secure a fixed return of $305.95 with the CD, while still maintaining access to the remaining $4,500 in a high-yield savings account, which could benefit from potential rate hikes ahead.
However, it's crucial to maintain the CD until its maturity date, as early withdrawal fees could negate all the interest earned to date. Ultimately, the decision between the two options will depend on your individual financial goals, risk tolerance, and the need for liquidity.
Written by urgent.news from CBS News's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.