With the Fed rate cycle moderating from 2024 peaks, CD and money market rates have come off their highs — but both still offer attractive yields relative to traditional savings accounts. The choice depends primarily on your liquidity needs.
2026 rate environment
| Product | Top 2026 rate | Liquidity |
|---|---|---|
| HYSA | 4.2–4.8% | Anytime |
| Money market account | 4.0–4.6% | Anytime |
| 3-month CD | 4.5–5.0% | 3 months locked |
| 6-month CD | 4.4–4.9% | 6 months locked |
| 12-month CD | 4.2–4.7% | 12 months locked |
| 5-year CD | 3.8–4.2% | 5 years locked |
When CDs make sense
The CD premium over liquid accounts narrows significantly in 2026. In 2023–2024, 12-month CDs paid 1–1.5% more than HYSAs. Now the gap is 0–0.5%. The liquidity cost of a CD is only worth it if:
- You expect rates to fall significantly (lock in today's rate)
- You want enforced savings discipline (can't access without penalty)
- The money has a specific use date (vacation in 6 months, tax bill in 12 months)
The CD ladder strategy
Divide savings across multiple CDs with staggered maturities: $5,000 in 3-month CD, $5,000 in 6-month, $5,000 in 12-month. As each matures, renew at whatever rate is current. You get partial liquidity every quarter while capturing CD yields. Works well for cash you don't need immediately but want accessible within a year.
Early withdrawal penalties
CD early withdrawal typically costs 60–180 days of interest. On a $10,000 12-month CD at 4.5% with 180-day penalty: leaving early costs $225. If you need the money in 9 months, a no-penalty CD or HYSA might beat the CD-then-early-withdrawal math.
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