$7,500 CD vs. $7,500 high-yield savings account vs. $7,500 money market account: Which will earn more now?
Summary
Certificates of deposit (CDs), high-yield savings accounts, and money market accounts all offer ways to earn interest on deposits around $7,500, with rates near 4% or higher. Over one year, CDs tend to earn slightly more interest than the other two, but savings and money market accounts offer more flexibility since their rates and access to funds can change.Key Facts
- CDs have a fixed interest rate, which means the rate stays the same until the CD matures.
- High-yield savings and money market accounts have variable rates that can change over time.
- A $7,500 1-year CD at 4.1% can earn about $307.50 in interest.
- A $7,500 high-yield savings account at 4.03% can earn about $302.25 in one year.
- A $7,500 money market account at 3.9% can earn about $292.50 in one year.
- CDs usually pay slightly more interest but do not allow easy access to funds before maturity without penalties.
- High-yield savings and money market accounts offer easier access to money and may benefit if interest rates rise.
- Splitting funds among different account types can help savers gain both higher earnings and better access.
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