$2,500 CD vs. $2,500 high-yield savings account vs. $2,500 money market account: Which will earn more over the next year?
Summary
The article compares how much interest a $2,500 deposit can earn in a certificate of deposit (CD), a high-yield savings account, and a money market account over different time periods. It shows that CDs often earn the most interest if you keep the money locked in, but savings and money market accounts offer more flexibility to access and add funds.Key Facts
- A 6-month CD at 4.10% would earn about $50.74 in interest on $2,500.
- A 6-month high-yield savings account at 4.03% would earn about $49.88 on $2,500.
- A 6-month money market account at 3.90% would earn about $48.28 on $2,500.
- Over 9 months, a high-yield savings account slightly outperforms a 9-month CD.
- Over 1 year, a CD at 4.10% earns the most interest—about $102.50 on $2,500.
- CDs lock the interest rate for the full term, guaranteeing returns if no early withdrawals are made.
- High-yield savings and money market accounts have variable rates that can change over time.
- Money market accounts allow features like check writing, offering more convenience than CDs or savings accounts.
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