$40,000 CD vs. $40,000 high-yield savings account vs. $40,000 money market account: Here's which will earn more now
Summary
A $40,000 deposit will earn different amounts of interest depending on the type of savings account it is placed in. Currently, a certificate of deposit (CD) offers the highest interest for longer terms, while high-yield savings accounts provide slightly higher returns for very short terms with easier access to funds.Key Facts
- The Federal Reserve recently paused interest rate changes, keeping savings rates stable for now.
- A 3-month CD at 3.90% earns about $384 in interest on $40,000.
- A 3-month high-yield savings account at 4.03% earns about $397, making it slightly better short term.
- For 6 and 9 months, CDs with rates around 4.05%-4.10% earn more interest than the savings or money market accounts.
- Money market accounts earn the least interest currently, around 3.90%.
- CD rates are fixed once locked in, while savings and money market rates can change over time.
- Savers may benefit by splitting their money across different accounts to balance interest earned and access to funds.
- The best choice depends on how long you plan to keep your money deposited and if you need easy access.
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