CD vs High-Yield Savings Account Calculator
Compare the returns of a Certificate of Deposit (CD) vs a High-Yield Savings Account (HYSA).
Find out which earns more based on your timeline.
Two simple products that often confuse savers
A CD and a HYSA both pay interest on cash deposits. Both are FDIC-insured up to $250,000 per depositor per bank. Both are completely safe. The differences are about timing, liquidity, and rate behavior.
| Feature | CD | HYSA |
|---|---|---|
| Rate | Fixed for term length | Variable, changes anytime |
| Term | Fixed (3 mo to 5+ yr) | None — keep open indefinitely |
| Early withdrawal | Penalty (3-12 months of interest) | None |
| Minimum deposit | Often $500-$1,000 | Usually $0 |
| FDIC insured | Yes ($250k/depositor/bank) | Yes ($250k/depositor/bank) |
| Best for | Money you definitely won’t touch | Emergency fund, savings goal under 1 year |
When a CD wins
CDs lock in today’s rate. If you believe rates are heading down (Fed cutting cycle), a 12-month CD at 5% beats a HYSA that might drop to 3.5% in 6 months. The lock-in is the feature.
Historical example: in late 2023, savers who locked into 5.25% 12-month CDs caught the rate peak. HYSA rates that were 5.0% then are 4.0-4.3% in mid-2024 as the Fed signals cuts.
When a HYSA wins
If rates rise, the HYSA goes up automatically. You also get full liquidity — withdraw any amount, any time, no penalty. For an emergency fund or money you might need on short notice, this is non-negotiable.
A HYSA also avoids the “what if I need it” tax. CDs technically pay slightly higher rates because of the illiquidity, but if you crack a 5% CD at month 6 and lose 3 months of interest, you’ve effectively earned 1.25% on that money for the year — worse than the HYSA at 4.5%.
The math: $10,000 in a 12-month example
| Strategy | After 12 months |
|---|---|
| 12-month CD at 5.0% APY | $10,500 |
| HYSA at 4.5% APY for full year | $10,450 |
| HYSA at 4.5%, drops to 3.5% in month 7 | $10,396 |
| HYSA at 4.5%, rises to 5.5% in month 7 | $10,499 |
| 1-month CD at 4.8% rolled monthly (avg 4.8%) | $10,480 |
The lock-in advantage on a 12-month CD is roughly 0.5-1.0 percentage points in a falling-rate environment. Less in a stable or rising environment.
The CD laddering strategy
For larger cash holdings ($25k+), CD laddering combines the best of both worlds:
- Divide cash into 4 equal portions
- Buy 3-month, 6-month, 9-month, and 12-month CDs
- When each matures, roll into a new 12-month CD
- After year 1, you have one CD maturing every 3 months
Benefits: continuous access to 25% of the money every quarter, average rate close to longest CD, no commitment loss if rates change mid-cycle.
This works particularly well with brokered CDs from Treasury Direct, Schwab, or Fidelity, where you can shop the best rates across hundreds of banks without opening accounts at each.
Current rate landscape (mid-2024)
| Product | Typical APY |
|---|---|
| Best HYSAs (Ally, Marcus, SoFi, Capital One 360) | 4.0 to 4.5% |
| 3-month CDs | 4.8 to 5.2% |
| 6-month CDs | 4.8 to 5.2% |
| 12-month CDs | 4.7 to 5.3% |
| 24-month CDs | 4.0 to 4.7% |
| 36-month CDs | 3.7 to 4.3% |
| 60-month CDs | 3.6 to 4.2% |
| Brokered CDs (Schwab, Fidelity, Vanguard) | Often higher than local banks |
| T-Bills (1-3 month) | 5.0 to 5.3% (state-tax-exempt) |
| 4-week to 1-year Treasury notes | 4.8 to 5.4% (state-tax-exempt) |
Note that brokered CDs and Treasury bills often beat both retail CDs and HYSAs. Treasury bills also have the bonus of state tax exemption — meaningful in high-tax states like California, New York, or Hawaii.
The brokered CD advantage
Brokered CDs from Schwab, Fidelity, or Vanguard:
- No-fee account access to CDs at hundreds of banks
- Often rates 0.3-0.7% higher than the bank’s own retail CDs
- Liquid secondary market — if you need to sell early, you sell to another buyer (price might be slightly lower) rather than paying an early withdrawal penalty
- Same $250k FDIC coverage as direct bank CDs
The downside: brokered CDs don’t auto-renew, and the secondary market price can be lower than face if rates have risen.
Early withdrawal penalties — the painful gotcha
Standard CD early withdrawal penalties:
| CD term | Typical penalty |
|---|---|
| Under 12 months | 3 months of interest |
| 12-24 months | 6 months of interest |
| 24-36 months | 9 months of interest |
| 4+ years | 12 months of interest |
| Brokered CDs | None (must sell on secondary market) |
A 12-month CD at 5% has a 3-month interest penalty of about 1.25% of principal. If you redeem after month 4, you’ve effectively earned about 0.4% — worse than any HYSA. CDs only work if you can hold to maturity.
Treasury bills — often the best option no one talks about
For maturities under 1 year, T-bills frequently beat CDs:
- Backed by the full faith and credit of the US government (highest credit quality)
- Rates often slightly above 12-month CDs
- Exempt from state and local income tax (saves 4-11% depending on state)
- Available in $100 increments via TreasuryDirect.gov
A 12-month T-bill at 5.2% in California (13.3% state tax bracket) is equivalent to a 6.0% CD on after-tax basis. For high earners in high-tax states, T-bills are usually the right call.
HYSA recommendations (2024)
Top HYSAs by category:
- Highest current rate: My Banking Direct, BrioDirect, UFB Direct (rates change frequently)
- Best big-name: Ally Bank, Marcus by Goldman Sachs, Capital One 360
- Best with checking integration: SoFi, Discover, Ally
- Best mobile app: Ally, Discover, Marcus
- Avoid: HYSAs that require minimum balances or charge fees
Bottom line
For an emergency fund: HYSA. Always. The liquidity is the feature.
For known-timeline savings (down payment in 12 months, wedding in 18 months): CD or T-bill, depending on rate and tax situation.
For larger holdings ($50k+): consider CD laddering or brokered CDs/T-bills via Schwab/Fidelity to get the best rates.
In a falling-rate environment: bias toward locking in longer-term CDs.
In a rising-rate environment: bias toward shorter CDs or HYSA.