What’s better, a money market or a high-yield savings account?

Which account suits you better depends on your preferences. HYSAs offer higher returns with lower balance requirements, but typically don’t offer debit access or check writing. MMAs provide more flexible access to your funds, but they could charge fees if you don’t meet balance requirements.

How much will $100,000 make in a money market account?

What your account yields on an annual basis depends on the account’s APY. For example, at 3% APY, $100,000 could earn around $3,000 at the end of the year before taxes.

What is the downside of a high-yield savings account?

For some, a downside to a HYSA could be that you generally can’t write checks from the account or use a debit card. Like all interest-bearing accounts, rates for HYSAs may fluctuate depending on the bank, so make sure to shop around.

CD vs. HYSA: How to Choose the Best Savings Strategy

5 Min Read | Published: 2 December, 2025 

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This article contains general information and is not intended to provide information that is specific to American Express products and services. Similar products and services offered by different companies will have different features and you should always read about product details before acquiring any financial product.

CDs vs. HYSAs explained: See which savings account offers better rates, more flexibility, and how to decide the best fit for your money.

At-A-Glance

Certificates of deposit (CDs) lock in your money for a set time with a fixed interest rate.
High-yield savings accounts (HYSAs) offer flexible access and variable interest rates.
The right choice for you depends on your savings timeline, goals, and need for flexibility.

When you’re ready to grow your savings, two common options are certificates of deposit (CDs) and high-yield savings accounts (HYSAs). Both are safe, interest-bearing accounts, but they work differently. CDs lock in your money for a fixed period in exchange for guaranteed rates, while HYSAs let you access your funds anytime, with rates that may change.

This guide compares CDs and HYSAs so you can decide which best fits your financial strategy.

What Is a CD and How Does It Work?

CDs are a type of savings account that locks in your deposit for a set term, allowing it to grow at a fixed interest rate. Once the CD reaches maturity (when the term is up), you can choose to renew the CD or take your money out.¹ Because CDs are typically insured by the Federal Deposit Insurance Corporation (FDIC), your funds are secure while they’re in the account.

CDs often offer higher rates than standard savings accounts,² and you may access better rates if you choose a longer term for your deposit.³ The term you choose for your CD depends on your savings timeline. You typically won’t be able to withdraw your funds while they’re maturing unless you pay a fee. You may want to consider a CD if you don’t need to access your savings in the near future and want predictable returns on your deposit.

What Is an HYSA and How Does It Work?

An HYSA is a type of savings account that generally offers significantly higher interest rates than traditional savings accounts.⁴ Like traditional savings accounts, they have variable interest rates that change based on economic conditions, and they’re often insured by the Federal Deposit Insurance Corporation (FDIC) up $250,000 for individual depositors.

HYSAs are typically more accessible than CDs, as you can withdraw from them multiple times a month and continue to deposit funds while they’re open. Since you can withdraw from them more frequently, they could work well if you’re building an emergency fund for unforeseen financial circumstances, or if you have a short-term savings goal, like saving money for a vacation or for an engagement ring.

EARN MORE with a High Yield Savings Account. Watch your savings grow. American Express National Bank, Member FDIC. Terms apply. Learn More.

CD vs. HYSA

	CD	HYSA
Interest Rate	Fixed	Variable
Access to Funds	Locked until maturity (penalties for early withdrawal)	Flexible, can withdraw frequently
Best For	Longer-term savings goals	Short-term savings and emergency funds
Safety	FDIC insured	FDIC insured

Which High-Yield Savings Strategy Should You Choose?

CDs and HYSAs are both useful savings options, and the one you choose for your funds may depend on why you’re saving. If you don’t think you’ll need to access your savings in the near future and prefer guaranteed returns, you may opt for a CD. If you want the flexibility to dip into your savings from time to time, an HYSA may work better for you. That said, your annual percentage yield (APY) for an HYSA is variable, so your projected returns are subject to change. In contrast, the APY for your CD is guaranteed when you make your deposit.

Some savers like to take advantage of both options. You may want to use an HYSA to save for emergencies or specific short- or medium-term goals, and then also put some of your funds in a CD for longer-term savings. Reflect on your financial goals and your savings needs before choosing a strategy that aligns with your objectives and timeline.

Frequently Asked Questions

The choice may depend on whether you need frequent access. CDs work best if you don’t need access to your money and want fixed returns, while HYSAs offer flexibility with variable rates. HYSAs often offer more flexibility, while short-term CDs may provide slightly higher rates.

It depends on the interest rate. For example, at 4%, a 1-year CD would earn about $400 in interest.

Yes, many savers have both. You may want to use an HYSA for emergencies and a CD for money you can set aside long-term.

The Takeaway

CDs and HYSAs are safe, smart ways to grow your money, but the best choice for you depends on your timeline and needs. If you want flexibility, an HYSA may be a better fit. If you want guaranteed returns, a CD could make sense. Some people may benefit from using both accounts to save, allowing them to separate different savings goals. Explore American Express High-Yield Savings Accounts and American Express Certificates of Deposit to see which is right for you.

¹ “What to Do When Your CD Matures,” Experian

² “Certificate of Deposit (CD),” Corporate Finance Institution

³ “Short-Term vs. Long-Term CDs,” Experian

⁴ “What Is a High-Yield Savings Account?,” Experian

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Scott Drueding Hanson is a content writer and copywriter based in Brooklyn. His work focuses primarily on personal finance.

All Credit Intel content is written by freelance authors and commissioned and paid for by American Express.

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