$25,000 short-term CD vs. $25,000 high-yield savings account: Which will earn more this year?
Summary
This article compares how much money you can earn by putting $25,000 into either a short-term certificate of deposit (CD) or a high-yield savings account in 2024. It shows that which option earns more depends on the length of the term and whether interest rates change during that time.Key Facts
- A short-term CD offers a fixed interest rate locked in for 3, 6, or 9 months.
- A high-yield savings account has a variable interest rate that can change based on the Federal Reserve’s actions.
- A 3-month CD at 3.90% earns $240.26 in interest; a high-yield savings account at 4.03% earns $248.16.
- A 6-month CD at 4.10% earns $507.35; the savings account earns slightly less at $498.77.
- A 9-month CD at 4.00% earns $746.31; the savings account earns $751.88.
- High-yield savings accounts earn a bit more in two of the three time periods if rates don’t change.
- CD earnings are guaranteed, which gives certainty to savers.
- The Federal Reserve is expected to keep rates steady through much of 2026, but changes could affect savings account earnings.
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