Which one is the best for 19 months, CD or HYSA?

[Lara]

I am planning to deposit a 19-month CD at 4.45% versus a high-yield savings account (HYSA) at 3.85% for $60,000. What are the key factors to weigh for this investment? Could you please let me know which option is the best at the moment?

[Kaile]

It totally depends on your needs for liquidity and interest rate stability. If you are sure that you don't need the money for the next 19 months, then a CD offers good, guaranteed returns. If you want the flexibility to withdraw the money without penalty, HYSA is good.

One more thing: CDs have a fixed rate, while HYSA rates can change. If interest rates rise, HYSAs earn more; if rates fall, CDs offer better returns. So, it's a strategic gamble.

[Luna Serenity]

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?

[Mark]

@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.