CD vs High-Yield Savings Calculator

If you might need the money soon or expect rates to rise, keep it in savings — it stays liquid and floats upward. If you can lock it away and expect rates to fall, a CD holds today's rate while savings accounts drift down. The rates themselves are often nearly identical; the difference is the lock.

Typically three to twelve months of interest, depending on the term. On a 24-month CD, six months is common. It comes out of interest earned, and if you break it very early you can forfeit more interest than you have accrued, dipping into principal. It is the price of the higher, locked rate.

Splitting money across CDs maturing at staggered intervals — say, every six months — so part of it comes due regularly. You capture CD rates while keeping some access, and each maturing CD can be reinvested at the going rate. See our CD ladder calculator for how to structure one.

Both follow the Fed, but differently. Savings rates adjust continuously — up when the Fed hikes, down when it cuts. A CD's rate is fixed the day you open it, for its whole term. That is the entire trade: give up the ability to follow rates up in exchange for protection if they fall.

Yes, both as ordinary income in the year earned, reported on a 1099-INT. For a CD longer than a year, you owe tax on the interest as it accrues each year, not only at maturity. Neither offers any tax advantage — unlike I bonds or municipal bonds.