When saving $50,000, it’s essential to consider your options for maximizing interest earnings. Two popular choices are Certificate of Deposit (CD) and high-yield savings accounts. While both offer attractive returns, they work in different ways.
Interest rates on CDs are fixed, ensuring stable earnings over the term, regardless of market fluctuations. In contrast, high-yield savings account rates can adjust based on market conditions.
We calculated interest-earning potential for each option using available rates and assumed no early withdrawal fees or rate changes during the CD term:
– $50,000 3-month CD at 4.30%: $529.04
– $50,000 high-yield savings account at 4.35% after three months: $535.10
Difference: High-yield savings earns $6.06 more
– $50,000 6-month CD at 4.45%: $1,100.39
– $50,000 high-yield savings account at 4.35% after six months: $1,075.92
Difference: CD earns $24.47 more
– $50,000 1-year CD at 4.40%: $2,200.00
– $50,000 high-yield savings account at 4.35% after one year: $2,175.00
Difference: CD earns $25.00 more
– $50,000 18-month CD at 4.16%: $3,152.23
– $50,000 high-yield savings account at 4.35% after 18 months: $3,297.73
Difference: High-yield savings earns $145.50 more
– $50,000 2-year CD at 4.10%: $4,184.05
– $50,000 high-yield savings account at 4.35% after two years: $4,444.61
Difference: High-yield savings earns $260.56 more
While the high-yield savings account may earn more in some scenarios, there’s no guarantee it will. For longer periods, especially if interest rates cut, it’s more likely to underperform. Savers must weigh the benefits of each option, considering guaranteed returns from CDs against potentially higher but volatile earnings from high-yield savings accounts.
With $50,000 at stake, making an informed decision is crucial. Remember, traditional savings accounts with average rates under 0.40% are essentially losing money due to low interest earnings.
Source: https://www.cbsnews.com/news/50000-cd-vs-50000-high-yield-savings-account-which-earns-more-interest-august-2025