$50,000 CD vs. $50,000 high-yield savings account: Here's which can earn more over the next year
Summary
This article compares how much money a $50,000 deposit can earn over one year in a certificate of deposit (CD) versus a high-yield savings account. It explains that CDs have fixed interest rates, while high-yield savings accounts have variable rates that can change, and shows the interest earned under current top rates for different timelines.Key Facts
- A CD typically offers a fixed interest rate around 4% or higher.
- A high-yield savings account has a variable rate, currently close to or slightly above CD rates.
- For a 3-month term, a high-yield savings account earns about $18 more in interest than a CD.
- For 6 months, both accounts earn the same amount of interest ($1,014.70).
- For 9 months, the high-yield savings account earns about $37 more than the CD.
- For 1 year, a CD earns about $25 more interest than the savings account.
- High-yield savings accounts allow easier access to money than CDs, which have restrictions.
- Traditional savings accounts have very low interest rates around 0.38%, making them less profitable.
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