Earlier this year, 5% or higher interest rates on CDs made this type of account look like an obvious win. After all, if you didn’t need ready access to that cash, you might as well have locked in the high rates that were on offer.
But as your CD balance grew, the rest of the world was changing. And that means you may find yourself needing that money back. In that case, you might want to consider opening a high-yield savings account (HYSA). Here’s why.
Interest might not be as important as liquidity right now
According to the New York Fed, Americans’ debt reached a record $17.8 trillion in the second quarter of 2024, and levels of credit card debt (and other revolving debt) have only risen since early 2021. That means that Americans should generally be prioritizing keeping cash liquid. That way, if an emergency comes up, you’ll be better-equipped to weather that storm without resorting to credit cards.
Even the best CDs are offering rates that are lower than HYSAs. However, this may change as rates drop in response to the Fed’s recent decision to cut its benchmark interest rate by half a percentage point.
Our Picks for the Best High-Yield Savings Accounts of 2024
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American Express® High Yield Savings 
APY 4.10%
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APY 4.10%
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Min. to earn $0 |
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Capital One 360 Performance Savings 
APY 4.10%
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APY 4.10%
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Min. to earn $0 |
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CIT Platinum Savings 
APY 4.70% APY for balances of $5,000 or more
Min. to earn $100 to open account, $5,000 for max APY
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APY 4.70% APY for balances of $5,000 or more
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Min. to earn $100 to open account, $5,000 for max APY |
But HYSAs offer something CDs typically don’t: The opportunity to earn competitive rates without sacrificing accessibility. And while CDs may require you to lock up that cash for months or even years to earn those high rates, HYSAs typically let you make several withdrawals per month (the actual limit will vary based on the account).
Interested in opening a high-yield savings account? Check out our list of the best high-yield savings accounts recommended by our experts.
Tips for moving CD funds to a HYSA
CDs come with terms, and that means you will typically pay an early withdrawal fee to access that cash before the maturity date. So it’s generally best to wait until that deadline unless you have a no-penalty CD.
In that case, you’d only have to wait until the CD is at least seven days old to avoid the federal minimum penalty requirement of seven days’ simple interest if you withdraw the cash within those first six days.
As for HYSAs, it’s important to look for options that meet your needs. This means looking beyond the APY. For example, you should consider the following:
- Account fees: Many accounts are fee free, but some may charge a fee for account maintenance or even frequent withdrawals.
- Withdrawal limits: You may also have a cap on the number of times per month you can withdraw from a HYSA.
- Minimum requirements to earn the highest APY: You may be required to keep a certain balance in your account to continue earning the highest APY.
- Bonus features or offers: Some HYSAs may offer additional perks, such as a temporary rate increase or even a cash bonus for signing up, which can make it more valuable than other accounts.
You should also have a goal for that cash. For example, it may be the foundation for your emergency fund, or it may be savings for a specific goal, like buying a house. If the account isn’t meeting your needs, that could be a sign it’s time to switch banks.
CDs can have their place in many Americans’ financial lives. But it’s important to hedge against potential threats, like credit card debt. By switching to an account that gives you easier access to your cash, you’ll be better prepared to manage the inevitable and unpredictable issues that life can throw at you.