Earning a high interest rate on your savings deposits can help your money grow faster. Nina Godlewski is a journalist turned content marketer, she has a bachelor’s degree in communication studies from Northeastern University. She loves to research complex business topics and break them down to make them more accessible to readers. She worked as a writer for Fundera (by NerdWallet,) covering small business topics like lending, credit cards, software, and services. She’s also written for Lendio, LendingTree, ValuePenguin, Newsweek, Business Insider, and Boston.com.

You have a long-term plan for these funds

She’s passionate about empowering people to make smart financial decisions by combining 10 years of finance industry experience with solid research and a wealth of knowledge. For example, a 12-month CD from both Goldman Sachs and Bask Bank charges 180 days’ worth of interest for early withdrawals. This means you could lose money on your investment if you need to withdraw in an emergency. Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more – straight to your e-mail. But it could all be a reminder that investors often do best when they have a mixed set of investments rather than going all-in on just a few.

What are certificates of deposit (CDs)?

In fact, there could be a situation where they reverse course and increase rates, similar to how they did the past few years. So if you lock in a rate now, you could miss out on a higher rate in the future. CDs can help you grow your savings over a longer term, and keep you from spending the money.

Large Time-Deposits (CDs of $100,000 or more), after a huge surge, have essentially flatlined since May 2024. In January, they ticked up to $2.35 trillion, according to the Fed’s monthly banking data. Bankrate has partnerships with issuers including, but not limited to, American Express, Bank of America, Capital One, Chase, Citi and Discover. A minimum opening deposit requirement of $1,000 is not uncommon, though you can find some with lower figures.

• However, when you put your cash in a CD account, you won’t be able to access this money until the account matures, or you’ll risk incurring a fee that can offset any interest earned.
• Italy’s benchmark index slumped 3.6%, its biggest single-day drop since March 2023.
• “So, if interest rates bump up and the penalty that they’re going to end up paying is going to be less than the money that they would end up receiving by moving into a new CD,” says Wilson.
• The shock will be exacerbated by plunging consumer and business sentiment and by any retaliation visited upon America as foreign countries potentially impose new tariffs on the United States.

But over the past 12 months, the battle for deposits has largely settled down. Most banks have plenty of deposits, and have dialed back the yields they offer, and some unhappy customers have moved their cash to MMFs or directly to T-bills. Money market accounts are known for their easy accessibility to funds.

Monthly fee

But even in retirement, some people will need their investments to last 30 years or more, said Niladri “Neel” Mukherjee, chief investment officer of TIAA Wealth Management. Wall Street’s fear gauge, the Cboe Volatility Index, or VIX, surged 39.6% on Thursday. “Extreme fear” was the sentiment driving markets, according to CNN’s Fear and Greed Index. The Fear and Greed index slumped to its lowest level this year as tariff anxiety gripped investors.

Back in 1984, a five-year CD had an average interest rate of 11.74% APY and a one-year CD wasn’t far behind at 11.17% APY, according to Bankrate. These days, CD rates are far more modest with five-year and one-year CDs averaging a little over one percent with highs of 5.60% for 12 months. Older investors have less time than younger ones to allow their investments to bounce back.

You know the interest rate you will receive throughout the time you own the CD before you acquire it. One of the most significant differences between CDs and MMAs is the accessibility of funds. They can change at any time without notice and tend to rise and fall with the Fed interest rate. Our calculators are here to help you analyze your numbers and ensure you’re on the path to meeting your financial goals. Using an updated version will help protect your accounts and provide a better experience.

Because it can take a few days to withdraw your money from a money market fund, they aren’t the best places invest in cds or money market to put cash you need immediately, like your emergency savings. And while the returns on a money market fund may outpace most deposit accounts, they usually pale in comparison to other investments, which makes them less than ideal for long-term goals such as retirement. You can open a fund through a brokerage like Fidelity or Charles Schwab by providing some personal information and then depositing your funds.

Investment options

One of the big negatives of market-linked CDs is that they subject the owners to tax on “phantom income.” Phantom income is money that you earn but aren’t actually paid. If you’re looking to preserve your original deposit and are hoping for greater returns, a market-linked CD is preferable. Market-linked CD rates and performance depend on the performance of the linked market or index. Consumer staples are the best-performing S&P 500 sector in 2025, up 5.4% even after two days of market carnage.

A high-yield savings account is best if you simply want a savings account but with a higher APY. A money market account is another type of savings deposit account that functions as both a savings and checking account in one. Its savings rate is variable, meaning it can change at any time. Its checking account features can include check-writing privileges, debit cards, ATM access, and even out-of-network ATM fee reimbursements.

• Money market accounts (MMAs) and certificates of deposit (CDs) are types of federally insured savings accounts that earn interest.
• Seychelle is a seasoned financial professional turned personal finance writer.
• CDs are more rigid than many savings and investment vehicles because they require you to lock up your money.
• This gives you the same rate of interest income regardless of whether you hold under $5,000 or over $25,000 in the account.
• When your CD matures, you’ll have to decide whether to roll it over, cash it out or shop around for a new CD.

However, if stocks continue to fall leading to a bear market and the country heads towards a recession, investing early in an economic downturn can lead to further losses. Whether buying the dip works out in the end depends on several factors. If the market is generally rising over time, and you buy a high-quality stock you believe will bounce back, it might be a successful strategy. In March, MarketWatch laid out specific criteria that can help determine if a dip is buyable. In the seven times stocks had declined, six coincided with a recession – showing markets are influenced by the economy’s overall trajectory, which is hard to predict right now. “So, if interest rates bump up and the penalty that they’re going to end up paying is going to be less than the money that they would end up receiving by moving into a new CD,” says Wilson.

However, there are a few things you need to know about the rates offered on each type of account. J.P. Morgan Wealth Management is a business of JPMorgan Chase & Co., which offers investment products and services through J.P. Morgan Securities LLC (JPMS), a registered broker-dealer and investment adviser, member FINRA and SIPC.

Certificates of deposit accounts are time deposits, which sets them apart from regular savings accounts. With a savings account and money market accounts, you can make withdrawals monthly, up to the limit specified by the bank. CDs require you to leave the money in the account until the CD matures. Once that happens, you can withdraw your initial deposit and the interest earned or roll the total amount into a new CD. A money market and high-yield savings account are similar in that they both offer a variable interest rate. The biggest difference between the two is that a money market account is more likely to give you features you typically find with a checking account, like debit card access.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every savings article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of savings and banking products. A high-yield savings account is best if you just want to upgrade your traditional savings account to one earning a higher return. A CD is best if you want to lock in a high APY and are OK leaving your savings untouched for a certain amount of time.