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If you’ve been eyeing those 4.00% certificate of deposit (CD) rates lately, you’re not alone. They might look like a safe bet — but before you lock up your money, it’s worth asking: Is this really the best move for your cash right now?
Looking for a secure place to grow your savings? See our expert picks for the best FDIC-insured high-yield savings accounts available today – enjoy peace of mind with competitive rates.
Let’s break down why high-yield savings accounts (HYSAs) might be a better home for your short-term savings — and how to pick one that works for you.
CDs come with a big catch: Once you deposit your money, it’s tied up for the entire term. If you pull your cash out early, you could lose interest or be forced to pay a penalty.
As of April 2025, many CDs are offering rates over 4.00%. But right now, you can get a similar or even better return from a high-yield savings account without giving up access to your money.
Plus, the interest on HYSAs is typically compounded daily and paid monthly, which helps your money grow faster.
The key difference, however, is that there’s no lock-in period. With an HYSA, you can move your money around if something better comes along or if you need it for an emergency. That’s a big advantage over CDs.
Let’s say your car needs repairs next month or you find a great deal on a summer vacation. With a CD, you’re stuck unless you’re willing to eat the penalty. With an HYSA, you can access your money whenever you want.
That kind of flexibility matters, especially for short-term savings goals — like building an emergency fund or putting aside cash for a future down payment.
If your money needs to be available at a moment’s notice, an HYSA is the way to go.
Not all high-yield savings accounts are created equal. Here’s what to look for:
Ready to get started? The Barclays Tiered Savings account is one of our favorites, offering a competitive APY with no account minimums. Read our full review to learn more.
CDs might sound appealing with their fixed rates, but they’re just not flexible enough for most people. With interest rates still high and an uncertain economic climate, a high-yield savings account gives you the best of both worlds — strong returns and easy access to your money.
Skip the CD for now and give your savings the freedom to grow with an HYSA.
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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.
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