Latest news with #highYieldSavings
CBS News
08-07-2025
- Business
- CBS News
$20,000 CD vs. $20,000 high-yield savings account: Here's which earns more now
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. The interest paid on a $20,000 CD can stack up pretty quickly if opened right now. Getty Images If you have $20,000 to invest, you may be contemplating the benefit of getting started in the stock market now. And while current performance looks strong, market uncertainty earlier this year rocked the savings and retirement portfolios of many Americans. The current climate, meanwhile, is hard to navigate, thanks to a combination of inflation, interest rates and changing economic policies. So while it may still be advantageous to play the market with $20,000, it's also a risk many savers may not feel comfortable with right now. This is where certificates of deposit (CDs) and high-yield savings accounts come into play. Both offer savers a safe place to keep their money as the principal deposit won't be impacted by market conditions. And both come with elevated interest rates that are many times higher than what's available with a traditional savings account now. But those rates aren't identical, and CD rates are fixed while high-yield savings account rates are variable and likely to change over time. Plus, CDs will require savers keep their money untouched until the account matures while high-yield savings accounts will keep the funds accessible. Before getting started, then, it helps to calculate the interest-earnings opportunity with both account types. Between a $20,000 CD and a $20,000 high-yield savings account, which earns more right now? That's what we'll calculate below. Start earning more interest on your money with a high-rate CD account here. $20,000 CD vs. $20,000 high-yield savings account: Here's which earns more now CD interest rates vary based on the term in question. Right now, rates tend to be higher on short-term CDs than they are on long-term ones. Here, then, is what a $20,000 deposit into each account type would earn now, based on readily available rates and the assumption that the high-yield savings account rate remains static: $20,000 3-month CD at 4.40%: $216.46 $216.46 $20,000 high-yield savings account at 4.30% after three months: $211.62 $211.62 Difference between the two accounts: The CD earns $4.84 more $20,000 6-month CD at 4.49%: $444.07 $444.07 $20,000 high-yield savings account at 4.30% after six months: $425.47 $425.47 Difference between the two accounts: The CD earns $18.60 more $20,000 9-month CD at 4.26%: $635.66 $635.66 $20,000 high-yield savings account at 4.30% after nine months: $641.59 $641.59 Difference between the two accounts: The high-yield savings account earns $5.93 more $20,000 1-year CD at 4.40%: $880.00 $880.00 $20,000 high-yield savings account at 4.30% after one year: $860.00 $860.00 Difference between the two accounts: The CD earns $20.00 more $20,000 18-month CD at 4.26%: $1,291.52 $1,291.52 $20,000 high-yield savings account at 4.30% after 18 months: $1,303.77 $1,303.77 Difference between the two accounts: The high-yield savings account earns $12.25 more $20,000 2-year CD at 4.20%: $1,715.28 $1,715.28 $20,000 high-yield savings account at 4.30% after two years: $1,756.98 $1,756.98 Difference between the two accounts: The high-yield savings account earns $41.70 more In these six circumstances, the CD earns more money in three of them. But it's important to note that there are other CD terms (like 3-year and 5-year CDs) in which this dynamic may be different. It's also important to be realistic about the long-term interest-earning potential of high-yield savings accounts. Today's available rates are unlikely to be the same in three months, let alone one year or longer. So savers will need to account for that volatility before getting started. Compare your CD and high-yield savings account options here to learn more. The bottom line Both CDs and high-yield savings accounts offer savers secure and reliable ways to store their $20,000 deposit right now. If you want a fixed return, a CD could be the option to pursue and if you want a high return that could change over time but that will still allow you access to your money, a high-yield savings account could be better. But remember that this isn't an "either/or" decision. For some savers, the best recourse is to split the $20,000 between both accounts, allowing you to earn substantial amounts of interest while still keeping a portion of your funds accessible as needed.
Yahoo
07-07-2025
- Business
- Yahoo
Best high-yield savings interest rates today, July 7, 2025 (Earn up to 4.3% APY)
Today's savings account rates still hover well above the national average. The Federal Reserve cut the federal funds rate three times in 2024, which means deposit account rates are also on the decline. It's more important than ever to ensure you're earning the highest rate possible on your savings, and a high-yield savings account could be the solution. These accounts pay more interest than the typical savings account — as much as 4% APY and higher in some cases. Not sure where to find the best savings interest rates today? Read on to find out which banks have the best offers. In general, high-yield savings accounts offer better interest rates than traditional savings accounts. Still, rates vary widely across financial institutions. That's why it's important to shop around and compare rates before opening an account. As of June 30, 2025, the highest savings account rate available from our partners is 4.3% APY. This rate is offered by EverBank and requires no minimum opening deposit. As you'll see, the majority of top savings rates come from online banks. These institutions have much lower overhead costs than traditional banks, so they can pass those savings on to customers in the form of higher rates and lower fees. Here is a look at some of the best savings rates available today from our verified partners: This embedded content is not available in your region. A high-yield savings account can be a good fit if you're looking for a secure place to store your money and earn a competitive interest rate while maintaining liquidity. Traditional savings accounts and certificates of deposit (CDs) have some of the highest interest rates we've seen in more than a decade, thanks to recent interest rate hikes by the Federal Reserve. Even so, the national average for these rates is fairly low compared to the top offers available. For example, the average savings account rate is just 0.38%, while 1-year CDs pay 1.62%, on average, according to the FDIC. The Fed is also expected to lower its target rate again in 2025, which means now might be the last chance for savers to take advantage of today's high rates. Taking the time to compare accounts and rates from various financial institutions will help you secure the best deal available. However, interest rates aren't the only factor to consider when choosing a savings account. For example, some banks may require that you maintain a minimum balance to earn the highest advertised rate and avoid monthly fees. Other factors to evaluate include customer service options and hours, ATM and branch access, digital banking tools, and the overall financial stability of the institution. Additionally, before opening a savings account, be sure that it's insured by the Federal Deposit Insurance Corporation (FDIC) — or the National Credit Union Administration (NCUA) if it's held by a credit union — so your money is protected in case the institution fails. Read more: How to open a savings account: A step-by-step guide
Yahoo
02-07-2025
- Business
- Yahoo
3 Mistakes To Avoid When Choosing a Bank Account, According to Ramit Sethi
If you're looking to open a new bank account to store your savings, you may narrow your options down to two types of accounts: a money market account or a high-yield savings account (HYSA). They have a lot in common — they both generate interest, they both generally allow you easy access to your money and they both, if with a FDIC-backed institution, provide coverage up to $250,000. Find Out: Read Next: But, as financial expert and self-made millionaire Ramit Sethi discussed on his website, I Will Teach You To Be Rich, there are differences between a money market account and a HYSA. For example, the former usually comes with transactional features, like a debit card and/or checkbook, while HYSAs are more exclusively geared toward growing your money. To make the best choice for you and your money, be careful to avoid common mistakes when deciding to open a new money market account or HYSA. When dealing with any transaction or onboarding process, it's so tempting to quickly scroll through all the fine print and just get to the parts where you sign and submit. All that fine print is so repetitive, tedious and dense. But this stuff is important — it's where you'll learn everything about fees and requirements. A financial institution may blast promotional messaging about 'no fees,' but often there's a caveat if you, say, drop below a minimum balance requirement or let your account sit idle with no new deposits. 'Banks often hide important fee information in the account terms and conditions,' Sethi wrote. 'Many people open accounts without understanding how maintenance fees work or what minimum balances they need to maintain. These fees can sneak up if you don't keep the required amount in your account, turning your interest earnings into monthly charges.' If you're not quite grasping what the fine print says, copy the text and paste it into ChatGPT, then ask the AI chatbot to explain it all in simple language, without repetition. When choosing a home for your savings, you need to find the bank account that will (safely, with FDIC backing) give you the highest interest rate. This will most likely be delivered by an online-only bank, not a traditional brick-and-mortar. Banks that operate exclusively online can afford to offer high interest rates because they don't have high infrastructure or overhead costs as traditional banks do. 'Traditional banks often rely on customer loyalty and convenience, offering much lower interest rates than their online competitors,' Sethi said. When searching for a new HYSA or money market account from an online bank, you're going to be blasted with a lot of marketing from banks that suggest they have the best interest rate around. Who really has the best interest rate though, and on what terms? 'Taking a few minutes to compare different online banking options could earn you substantially more interest on your savings,' Sethi wrote. A money market account can act in some ways like a checking account, which is one of its appeals, but at their cores, the two are different beasts. Sethi warned against treating a money market account like a checking account. Doing so could slam you with fees. 'One of the costliest mistakes comes from misusing money market accounts,' Sethi said. 'Despite their check-writing features, these accounts aren't designed for regular transactions. Many people treat them like checking accounts and end up paying fees for exceeding transaction limits.' Understand the ways in which your money market account works not only like a checking account, but like a HYSA. It likely limits the types of transactions, for example, whereas a checking account doesn't. At the end of the day, you may be wondering why your bank accounts, in terms of all the technical fine print, matter so much. Well, ultimately, it's all part of building wealth. Consider Sethi's wisdom here, 'Managing your accounts effectively is just one piece of building a strong financial foundation.' More From GOBankingRates 3 Reasons Retired Boomers Shouldn't Give Their Kids a Living Inheritance (And 2 Reasons They Should) This article originally appeared on 3 Mistakes To Avoid When Choosing a Bank Account, According to Ramit Sethi
CNET
23-06-2025
- Business
- CNET
I Know You Don't Want to Hear This, but It's Time to Start Your Holiday Savings. I'll Make It Easy for You
Getty Images/Viva Tung/CNET Can you believe we have only six months until Christmas? That can feel like plenty of time, especially when we haven't even started back-to-school shopping yet. But with stores starting holiday sales earlier and earlier, I want to be prepared. And with tariff uncertainty already raising prices, I want to be prepared so I don't overspend or turn to credit cards during the holiday season. So yes, I'm saving for "the most wonderful time of the year" now, and you should, too. Here's my holiday savings plan and where I'm stashing the money until I need it. How I'm saving for the holidays now Starting this week, I have an automatic transfer set to move $50 from my checking account to my high-yield savings account every time I get paid. Since I'm paid twice a month, that will add up to $550 by Dec. 1. By starting now, I'll also have a good amount saved if any deals or sales pop up sooner, like on Black Friday. If I buy a gift before I hit my $550 goal, I'll deduct it from my budget to avoid overspending. If you also want to plan ahead, figure out how much you can comfortably afford to move into a savings account each pay period. Even if you can afford only $25 a month, you'll still have $150 saved before the end of December. How a high-yield savings account makes it easy I'm keeping my holiday fund in my high-yield savings account. I use Ally Bank, which offers a 3.60% annual percentage yield, but any bank offering you over 3.5% APY will do. I won't earn much in six months by only depositing a couple of hundred dollars, but it's better than what I'd earn by letting it sit in a checking account or traditional savings account earning 0.02% APY at best. Ally's high-yield savings account also comes with two unique features that I love. First, it offers goal-tracking so I can see how close I am to reaching my holiday fund goal. And Ally's savings buckets help me keep my holiday fund separate from my emergency fund without opening a separate account. Interest and savings features aside, keeping this money in an account separate from my checking and everyday spending prevents me from accidentally dipping into it. If you struggle with impulse buying, keeping money that's earmarked for other goals separate can help eliminate this temptation. If you don't already have a high-yield savings account, check out CNET's recommendations. Look for an account with a competitive APY, no monthly fees and easy access so you can quickly transfer your funds.
Yahoo
23-06-2025
- Business
- Yahoo
Best high-yield savings interest rates today, June 23, 2025 (Earn up to 4.31% APY)
Today's savings account rates still hover well above the national average. The Federal Reserve cut the federal funds rate three times in 2024, which means deposit account rates are also on the decline. It's more important than ever to ensure you're earning the highest rate possible on your savings, and a high-yield savings account could be the solution. These accounts pay more interest than the typical savings account — as much as 4% APY and higher in some cases. Not sure where to find the best savings interest rates today? Read on to find out which banks have the best offers. In general, high-yield savings accounts offer better interest rates than traditional savings accounts. Still, rates vary widely across financial institutions. That's why it's important to shop around and compare rates before opening an account. As of June 23, 2025, the highest savings account rate available from our partners is 4.31% APY. This rate is offered by VIO Bank and there is no minimum opening deposit required. As you'll see, the majority of top savings rates come from online banks. These institutions have much lower overhead costs than traditional banks, so they can pass those savings on to customers in the form of higher rates and lower fees. Here is a look at some of the best savings rates available today from our verified partners: This embedded content is not available in your region. A high-yield savings account can be a good fit if you're looking for a secure place to store your money and earn a competitive interest rate while maintaining liquidity. Traditional savings accounts and certificates of deposit (CDs) have some of the highest interest rates we've seen in more than a decade, thanks to recent interest rate hikes by the Federal Reserve. Even so, the national average for these rates is fairly low compared to the top offers available. For example, the average savings account rate is just 0.38%, while 1-year CDs pay 1.62%, on average, according to the FDIC. The Fed is also expected to lower its target rate again in 2025, which means now might be the last chance for savers to take advantage of today's high rates. Taking the time to compare accounts and rates from various financial institutions will help you secure the best deal available. However, interest rates aren't the only factor to consider when choosing a savings account. For example, some banks may require that you maintain a minimum balance to earn the highest advertised rate and avoid monthly fees. Other factors to evaluate include customer service options and hours, ATM and branch access, digital banking tools, and the overall financial stability of the institution. Additionally, before opening a savings account, be sure that it's insured by the Federal Deposit Insurance Corporation (FDIC) — or the National Credit Union Administration (NCUA) if it's held by a credit union — so your money is protected in case the institution fails. Read more: How to open a savings account: A step-by-step guide
