High-yield savings accounts vs CDs: a 2025 comparison
Both high-yield savings accounts (HYSAs) and certificates of deposit (CDs) beat a standard bank savings account by a wide margin. But they work differently, and the right choice depends on when you'll need the money.
High-yield savings accounts in 2025
Online banks and fintechs currently offer HYSAs paying 4.5–5.0% APY — compared to the national average of around 0.46% at traditional banks. That's 10x more interest on the same money with the same FDIC protection.
| Account type | APY | Interest earned |
|---|---|---|
| Traditional savings | 0.46% | $46 |
| High-yield savings | 4.75% | $475 |
| 12-month CD | 5.10% | $510 |
Certificates of deposit (CDs)
CDs lock your money for a fixed term — typically 3 months to 5 years — in exchange for a guaranteed rate. The longer the term, the higher the rate (usually). Current 12-month CD rates from online banks are running 4.8–5.2% APY.
The catch: if you withdraw early, you pay a penalty — typically 90–180 days of interest. For money you might need, that's a real cost.
Key differences
- Flexibility: HYSAs allow unlimited withdrawals (within federal limits). CDs lock your money until maturity.
- Rate certainty: HYSA rates float with the market and can drop. CD rates are locked for the term.
- Yield: CDs typically offer slightly higher rates in exchange for the lockup period.
- Best for: HYSAs for emergency funds and short-term savings. CDs for money you won't need for a defined period.
The CD ladder strategy
If you have a larger sum to save, consider a CD ladder: split the money into equal portions and put each in CDs with different maturity dates (3-month, 6-month, 9-month, 12-month). As each matures, either spend it or roll it into a new longer-term CD. You get higher rates than a savings account with more flexibility than a single long-term CD.
Top-rated HYSAs in 2025 include SoFi, Marcus by Goldman Sachs, and Ally Bank. All are FDIC-insured and have no monthly fees.
Emergency fund and money you might need in the next 12 months → high-yield savings account. Money you definitely won't touch for a set period → CD. Don't keep either in a traditional bank savings account.