Fixed Deposit

I'm comfortable with the safety of Treasuries and fixed deposits, but I'm seeing higher yields abroad. Does the extra interest justify the complications that come with currency volatility and foreign laws? I'm worried that dealing with exchange rates and the hassle of getting my money back makes it simpler to stay local.

With rates likely to drop, I’m trying to decide between locking in a CD or staying liquid in a HYSA. Since my home-buying timeline could shift, how do I balance higher yields against the risk of early withdrawal penalties?

@Luna-Serenity said in Which one is the best for 19 months, CD or HYSA?:

If every choice has its downsides, how can someone be sure about choosing a CD or an HYSA without knowing what will happen to interest rates soon?

Well, deciding between a Certificate of Deposit (CD) and a High-Yield Savings Account (HYSA) depends on your goals and flexibility.

As mentioned earlier, CDs offer fixed returns and stability, but they lock in funds, whereas HYSAs provide liquidity and adaptability to rising rates.

So, balancing flexibility with returns—or even diversifying between both—can help navigate uncertain interest rate trends effectively.

In the US, fixed deposits are called Certificates of Deposit (CD). There are 5 main types of CDs offered by the banks. These are:

Traditional CDs: They have a fixed term length and interest rate. High-Yield CDs: They offer higher interest rates than traditional CDs. No-Penalty CDs: Allows early withdrawal with any penalties for a certain period. Bump-Up CDs: Allows the customer to request a one-time increase in the interest rate if market rates rise. Jumbo CDs: A significant deposit, usually $100,000 or more, is required to access the higher interest rates of these CDs.

There are many banks that provide highly competitive CD rates:

Capital One 360 Ally Bank Marcus by Goldman Sachs Credit Unions

You can select any bank and open a fixed amount there; all the banks provide good interest rates on fixed deposits.

Usually brokered CDs are insured by the FDIC upto $250,000 per individual at each bank. Just make sure the insurance relates to the issuing bank rather than from any broker.

Minimum deposit, bank's reputation, interest rates, maturity dates and early withdrawal penalties you need to keep in mind while choosing the suitable CD for yourself.

You should avoid foreign broken CDs, as these are not FDIC insured, but still, if you want to take them, then carefully investigate the reputation and financial condition of that bank.

To get your money back from the bank, document everything, including when you contracted with the bank, the person who spoke with you, the mobile number, and all the corresponding emails. File an online complaint with the Consumer Financial Protection Bureau (CFPB), explain your situation, and submit all the documents related to your bank account. CFPB gives you a timely response.

The current Federal Reserve Rate is 5% to 5.25%, which you need to keep in mind while choosing between short-term and long-term goals. To control inflation and economic growth, the Federal Rates need to be changed from time to time.

But you have short-term goals, so you can choose High-Yield Savings Accounts, Certificates of Deposit (CDs), Money Market Accounts, Treasury Bills (T-Bills), and Short-Term Bond Funds.

All these options are good for short-term goals. They often require a minimum balance to qualify for the higher rates, have flexibility with your money, and have fixed interest rates from a few months to a few years.