$10,000 1-year CD vs. $10,000 high-yield savings account: Which will earn more interest?
Summary
Putting $10,000 into a 1-year certificate of deposit (CD) or a high-yield savings account can earn more interest than a regular savings account today. The CD offers a fixed rate, earning about $417 in a year, while the high-yield savings account has a variable rate, earning about $410 if rates stay the same.Key Facts
- Traditional savings accounts currently pay very low interest rates, around 0.38%.
- CDs and high-yield savings accounts are offering rates close to 4% now.
- A 1-year CD locks in a fixed interest rate, so earnings are predictable.
- High-yield savings accounts have variable rates that can change over time.
- With $10,000, a 1-year CD paying 4.17% would earn about $417 in interest.
- The same amount in a high-yield savings account at 4.10% would earn about $410 if the rate stays stable.
- If high-yield savings rates rise, that account could earn more than the CD.
- Online banks often offer better rates than traditional banks with physical branches.
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