And those fees may offset any interest earned during the period.
A penalty may be associated if you need to access the funds sooner.
Once you've moved savings into a CD account, the money can't be withdrawn until the maturity date. Put in the funds, and once the CD hits the maturity date, you're guaranteed the money plus interest.Ī CD may offer a higher interest rate than a standard savings account. However, those higher rates come in exchange for reduced flexibility. Depending on the financial institution, the term can run from a few days to ten years or more. What is a CD?Ī Certificate of Deposit is a deposit account with a pre-determined fixed interest rate over a specified period, called a maturity date. Here's what to know about how CDs and high-yield savings accounts work and why you might prefer one over the other. And depending on your needs, those differences may impact your choice. However, each has advantages and drawbacks. You've built up some savings, but where to put the money? Certificates of Deposit (CDs) and high-yield savings accounts can help your money to grow at a higher interest rate than a traditional savings account. High-Yield Savings Account: What Are The Differences?
