High-Yield Savings vs. CDs vs. Money Market Accounts: Where to Keep Your Cash

Cash sitting in a traditional checking account often earns little or nothing. Moving it to the right type of insured account can earn significantly more with no added risk.

High-yield savings accounts

Offered mainly by online banks and some credit unions, these pay far more than the national average savings rate. The rate is variable and can change at any time, but your money stays accessible.

Best for: emergency funds and short-term goals.

Certificates of deposit (CDs)

A CD locks your money for a set term, from a few months to five years or more, at a guaranteed rate. Withdrawing early usually triggers a penalty of several months of interest.

Best for: money you won't need until a known date, especially when you want to lock in a rate before expected cuts. A CD ladder, splitting cash across staggered maturities, balances yield and access.

Money market accounts

These bank deposit accounts combine competitive variable rates with limited check-writing or debit access. Some require higher minimum balances.

Note: a money market account at a bank is FDIC-insured; a money market fund at a brokerage is an investment and is not.

How to compare

• Look at the APY, which includes compounding.
• Check minimum balances, monthly fees and transfer limits.
• Confirm FDIC or NCUA insurance.
• For CDs, read the early withdrawal penalty.

The bottom line: keep your emergency fund liquid in a high-yield savings account, and use CDs for money with a set timeline.

This guide is for general information only and is not financial advice. See our Disclaimer.