economy
$100,000 Short-Term CD vs. $100,000 High-Yield Savings Account: Which Will Earn More This Year?
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TL;DR
- A $100,000 deposit can be placed in a short-term CD or a high-yield savings account to protect savings from inflation.
- Short-term CDs offer fixed rates for terms of 12 months or less, while high-yield savings accounts have variable rates.
- Over three months, a high-yield savings account at 4.03% earns $992.62, compared to a 3-month CD at 3.90% earning $961.06.
- Over six months, a 6-month CD at 4.10% earns $2,029.41, slightly more than a high-yield savings account at 4.03% earning $1,995.10.
- Over nine months, a high-yield savings account at 4.03% earns $3,007.52, compared to a 9-month CD at 4.00% earning $2,985.24.
- In most scenarios, the high-yield savings account is more profitable, but the difference is not significant.
- Savers should carefully evaluate both options and consider splitting funds between them to leverage their respective advantages.