CD vs. Savings Account Calculator
Lock in a rate or stay liquid — run the math both ways. Punch in your deposit and the two rates you're weighing, and see how much extra (or how little) the locked rate really buys you.
CD vs. HYSA — Side-by-Side Calculator
Same deposit, same monthly contribution, same time horizon. Only the rate differs.
Most CDs don't allow ongoing deposits — leave this at $0 for a true single-deposit CD comparison.
HYSA rates float — this calculator assumes today's rate holds for the full term.
CD at 4.6% for 3 years
$21,108
HYSA at 4.2% for 3 years
$20,914
Gap: $193 in favor of the CD.
What's the difference?
A certificate of deposit (CD) is a time deposit. You hand the bank a chunk of money, agree to leave it there for a set term (3 months to 5 years is the common range), and the bank guarantees a fixed rate for that whole term. Touch the money before it matures and you pay an early-withdrawal penalty.
A high-yield savings account (HYSA)is a plain savings account at an online bank, paying several percentage points more than a brick-and-mortar bank because the online bank doesn't carry branch overhead. The rate is variable — it moves up and down with the Fed — but the money is fully liquid. You can pull it any business day.
Both are FDIC-insured up to $250,000. Both compound interest the same way under the hood. The choice is really about rate certainty vs. liquidity.
When does a CD win?
The CD wins in three specific scenarios:
- Rates are falling (or about to).If the Fed is cutting, a CD locks in today's higher rate while the HYSA drops every time the Fed moves. Lock a 5-year CD at 4.8% just before a cutting cycle and you may end up earning 2 points more than the HYSA in years 3, 4, and 5.
- You can earmark the money.Down payment 2 years out. Tuition payment in 18 months. Money you've already mentally committed to a future date — the lockup isn't a sacrifice because you weren't going to touch it anyway.
- You want to remove temptation. Some people save better when the money is harder to spend. A CD forcibly puts the money out of reach until maturity, which can be worth a fraction of a percent of yield all on its own.
When does the HYSA win?
The HYSA wins everywhere else:
- Rates are rising. The HYSA tracks up; the CD stays stuck at the rate you locked. In 2022–2023, savers who bought 2% CDs in early 2022 watched HYSAs march past 4% and then 5% while they were trapped on the sidelines.
- You need access — even maybe.Emergency funds, near-term reserves, any money you might need on a couple days' notice. Paying an early-withdrawal penalty wipes out months of interest; the penalty alone is often worse than the rate spread you were chasing.
- You're still building the balance.Most CDs don't accept ongoing deposits. If you're actively contributing $300/month to savings, the HYSA lets every new dollar start earning the day it arrives. A CD freezes the principal at the day of purchase.
Early-withdrawal penalty math
The penalty is the part people underestimate. Here's a concrete worked example.
You put $10,000 into a 2-year CD at 4.50% APY. The bank's early-withdrawal penalty is 6 months of interest.
After 12 months, you've earned about $460 in interest and your balance is $10,460. Then something comes up and you need the cash.
The penalty is 6 months of interest on $10,000 — roughly $225. That comes out of your balance. You walk away with $10,235.
In the meantime, a 4.20% HYSA would have left you with about $10,428 — fully accessible, no penalty, $193 morein your pocket. The CD's 30 bps of rate premium got entirely consumed by the penalty.
The further into the term you break a CD, the smaller the penalty hurts relative to interest earned — but if there's any meaningful chance you'll need the money in the first half of the term, the math nearly always favors the HYSA.
CD ladders, explained
A CD ladder is a way to get most of the CD's long-term rate without the all-or-nothing liquidity problem. The classic 5-year ladder:
- Split the money into 5 equal pieces.
- Buy a 1-year, 2-year, 3-year, 4-year, and 5-year CD on day one — one piece in each.
- When the 1-year matures, roll it into a new 5-year CD. From year 2 onward, you have a 5-year CD maturing every single year.
The ladder gives you the higher rates that long-term CDs offer while still putting 20% of your money within reach every year. It's the closest you can get to having a CD and a HYSA at the same time. The trade-off is administrative — five CDs to track and renew — which is why many people with under $25,000 just leave it in a HYSA and skip the complexity.
A simple decision rule
You don't actually have to pick one. Most savers do best with both — a HYSA for the working balance and a CD (or ladder) for money with a known future date.
Default rule: Keep 3–6 months of expenses in a HYSA. Anything beyond that with a known date 1+ year out goes into a CD or CD ladder at the best available rate. Anything you might need next month stays liquid.
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Frequently Asked Questions
Which has better compound interest — a CD or a savings account?
At the same rate, both compound identically — the math doesn't care which label is on the account. What changes the answer is rate stability. A CD locks today's rate in for the full term, while a HYSA's rate moves with the Fed. In a rate-cutting cycle the CD typically wins; in a rate-rising cycle the HYSA catches up and overtakes.
How does an early-withdrawal penalty actually work on a CD?
Most CDs charge a penalty equal to a fixed number of months of interest if you break the CD before maturity. Common terms: 3 months of interest on 1-year CDs, 6 months on 2–4 year CDs, and 12 months on 5-year CDs. On a $10,000 CD at 4.5%, six months of interest is roughly $225 — and if you withdraw in the first year, the penalty can wipe out the entire interest earned plus some principal.
Are high-yield savings account rates guaranteed?
No. HYSA rates are variable and can change any day with no notice. They tend to track the federal funds rate — when the Fed cuts, online banks usually cut within a week or two. The rate you see today is not a promise; it's a snapshot.
Do CDs compound daily or monthly?
It depends on the bank, but most US banks compound CD interest daily and credit it monthly. The APY you're quoted already includes the compounding effect, so a 4.50% APY CD truly returns 4.50% over a year regardless of whether it's compounded daily, monthly, or quarterly — that's the whole point of APY as a standardized comparison number.
Is a CD ladder worth the extra hassle?
For money you genuinely won't need for 1–5 years, yes. A 5-rung ladder gives you a maturing CD every year (so you always have liquidity within 12 months) while still capturing longer-term rates. The downside is administrative — you have five CDs to track, renew, or roll. For under $25,000, many people find the rate pickup not worth the hassle and just use a HYSA.
Are CDs and HYSAs both FDIC-insured?
Yes — both are insured up to $250,000 per depositor, per bank, per ownership category. Same insurance, same backstop. If your balance approaches $250,000, spread across multiple banks (or use a service like IntraFi) to stay fully covered regardless of which product you choose.