3 Reasons I'll Pick a Savings Account Over a CD Any Day

Certificates of deposit (CDs) have a lot going for them right now. CD rates are the highest they've been in nearly two decades, with some offering APYs of over 5%. That's impressive, especially from such a secure investment. You also lock in your rate for the entire term when you open a CD, protecting you if rates drop in the future.

Despite the benefits of CDs, I'm not going to open one. I've decided to stick to my savings account for these key reasons.

1. I like being able to access my savings whenever I want

CDs protect you if rates drop, since the interest rate is guaranteed for the entire term. The tradeoff is that you can't pull out money whenever you want like you can with a savings account. If you do so before the maturity date, you'll pay an early withdrawal penalty. This could be months' or even years' worth of the interest you've earned.

Some people don't mind that, but I want easy access to my money. I like having the option of putting a portion of my savings in stocks if I want to go more investment-heavy. Or, I may decide to open a new bank account for a bank bonus. Those sometimes require transferring over a large amount of money.

Our Picks for the Best High-Yield Savings Accounts of 2024

Product	APY	Min. to Earn
American Express® High Yield Savings Member FDIC. APY 3.80% Rate info 3.80% annual percentage yield as of January 10, 2025. Terms apply. Min. to earn $0 Open Account for American Express® High Yield Savings On American Express's Secure Website. Member FDIC.	3.80% Rate info 3.80% annual percentage yield as of January 10, 2025. Terms apply.	$0	Open Account for American Express® High Yield Savings On American Express's Secure Website.
Capital One 360 Performance Savings Member FDIC. APY 3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening. Min. to earn $0 Open Account for Capital One 360 Performance Savings On Capital One's Secure Website. Member FDIC.	3.80% Rate info See Capital One website for most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of Dec. 6, 2024. Rates are subject to change at any time before or after account opening.	$0	Open Account for Capital One 360 Performance Savings On Capital One's Secure Website.
Western Alliance Bank High-Yield Savings Premier Member FDIC. APY 4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY. Min. to earn $500 to open, $0.01 for max APY Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website. Member FDIC.	4.40% Rate info The annual percentage yield (APY) is accurate as of Jan. 2, 2025, and subject to change at the Bank’s discretion. Refer to product’s website for latest APY rate. Minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.	$500 to open, $0.01 for max APY	Open Account for Western Alliance Bank High-Yield Savings Premier On Western Alliance Bank's Secure Website.

Having that kind of flexibility is important for me. If it's important for you, too, then a savings account is a better way to go. High-yield savings accounts are also offering excellent rates right now, even if these aren't fixed rates like with CDs.

2. I prefer keeping it simple with my savings

I've been trying to simplify my finances and save time lately. One way I've done that is by consolidating my accounts. I set up one brokerage account for all my investments, and I put all my savings in one high-yield savings account. I like this because I have less to manage, and I can get a snapshot of my current savings and investment situations by logging into just two accounts.

If I added CDs to the mix, it would make my finances more complicated. I'd probably need to open CDs with new banks to make sure I got the best CD rates. I'd also need to keep track of the maturity dates on any CDs I opened. This one matures in August 2026, that one in February 2027, and so on.

Once again, some people are fine with that. They keep everything well-organized and know exactly how much money they can put in a CD, and for how long. But if you'd rather keep it simple with your money, a CD may not be the right choice.

3. CDs don't fit my current financial goals

CDs are a good fit if you have savings you know you won't need for a set amount of time. For example, if you have $30,000 to use for a down payment on a home in two years, you could put it in a CD.

My current goals don't align well with CDs. My main focus is on building wealth, so I invest heavily. I also like having money saved for large expenses, such as travel, clothes, and electronics. But I don't know exactly when I'm going to make those purchases, so a CD wouldn't work for them.

If you're not sure about CDs, reflect on your current financial goals. This should help you figure out if CDs can assist with those goals or if there are better options available.

Those are my reasons for not cashing in during the CD gold rush. If you feel the same way, remember that there's nothing wrong with sticking to a high-yield savings account. It will keep your savings safe, which is what's most important, and you'll have full access to it.