Is a CD or a High-Yield Savings Account Better to Open This September? Here's What to Consider.
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TL;DR
- The Federal Reserve may raise interest rates in September, a move not seen since July 2023.
- CDs currently offer higher, fixed interest rates, guaranteeing a predictable return.
- High-yield savings accounts offer variable rates that can increase with Fed hikes and allow penalty-free access to funds.
- CDs lock in funds until maturity, while early withdrawal incurs fees that can negate earnings.
- Online banks often provide better rates for both CDs and high-yield savings accounts.
- Splitting funds between both account types could offer both protection and maximized returns.