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The choice between a long-term certificate of deposit (CD) and a high-yield savings account often comes down to personal preference.
A CD, after all, comes with a fixed interest rate that will earn savers reliable returns, even if the rate climate shifts one way or the other. But savers will need to keep their money in the account for the full term, which for a long-term CD could be more than one year, or they’ll risk being hit with an early withdrawal penalty.
A high-yield savings account, on the other hand, comes with a variable interest rate that will be reactive to market changes over time. But savers won’t need to keep their money frozen in the account as it will operate in the same ways a traditional savings account does, albeit with a higher interest rate (thus the name of the account).
With both accounts operating in different ways, then, it can be hard for savers to determine which makes a better home for their money. And that’s an important consideration to get right, especially if you’re looking to deposit a five-figure amount of money, like $10,000, into either account. To better determine which makes more sense for your financial situation, then, it helps to calculate the interest-earning potential of either account if opened now, in early July 2025. Below, we’ll complete the calculations.
See how much more you could be earning with a high-rate CD here.
$10,000 long-term CD vs. $10,000 high-yield savings account: Here’s which earns more now
CD interest rates vary based on term, but no matter which term you choose, the rate you open the account with will be the same one it matures with. The same can’t be said for high-yield savings accounts, with rates that will inevitably change over time. In other words, predicting the future interest earnings on a high-yield savings account will require some guesswork and approximation. Here, then, is what a $10,000 deposit will earn with both account types, tied to readily available interest rates on the assumption that the high-yield savings account rate will remain constant:
- $10,000 18-month CD at 4.26%: $645.76 for a total of $10,645.76
- $10,000 high-yield savings at 4.30% over 18 months: $651.88
- Difference between the two accounts: The high-yield savings account earns $6.12 more.
- $10,000 2-year CD at 4.20%: $857.64 for a total of $10,857.64
- $10,000 high-yield savings account at 4.30% over two years: $878.49
- Difference between the two accounts: The high-yield savings account earns $20.85 more.
- $10,000 3-year CD at 4.25%: $1,329.96 for a total of $11,329.96
- $10,000 high-yield savings account at 4.30% after three years: $1,346.27
- Difference between the two accounts: The high-yield savings account earns $16.31 more.
On paper, then, a $10,000 high-yield savings account is more profitable than a $10,000 long-term CD in all three scenarios. But that’s on paper, and the reality is that interest rate cuts are likely to change this dynamic, perhaps substantially and maybe sooner than expected. With the CME Group’s FedWatch tool listing a Fed rate cut at an approximate 70% chance for their September meeting, it may make sense to lock a high CD rate now, even though high-yield savings account rates are slightly higher as of July 2025.
Compare your high-yield savings and CD account options here to learn more.
The bottom line
A $10,000 high-yield savings account could make more than a $10,000 long-term CD calculated against the interest rates that are available now … but it likely won’t, considering the real potential for rate cuts to be issued again later in 2025 and 2026. But with rates on both accounts elevated right now and considering the pros and cons of each, many savers may find that their optimal recourse is to simply split their funds among both. By putting $5,000 into each account type, instead, savers can benefit from the high rates each offers while still maintaining access to a healthy portion of their funds in case of emergency or rising expenses.
