$40,000 CD vs. $40,000 high-yield savings account vs. $40,000 money market account: Here's which will earn more now
A $40,000 deposit can earn different amounts depending on whether it is placed in a certificate of deposit (CD), high-yield savings account, or money market account, with current interest rates influencing returns. Over three months, a high-yield savings account earns slightly more than a CD or money market account, but over six and nine months, a CD becomes the most profitable option. While CDs offer higher returns for locked-in terms, high-yield savings and money market accounts provide more liquidity and potential for rate increases over time.
- ▪The Federal Reserve's recent decision to pause interest rates maintains current high yields for savers.
- ▪A $40,000 3-month CD at 3.90% earns $384.42, while a high-yield savings account at 4.03% earns $397.05 over the same period.
- ▪Over six months, a $40,000 CD at 4.10% earns $811.76, outperforming both high-yield savings and money market accounts.
- ▪Money market accounts currently offer lower rates than CDs and high-yield savings accounts, resulting in lower interest earnings.
- ▪High-yield savings and money market accounts provide easier access to funds compared to CDs, which impose penalties for early withdrawal.
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MoneyWatch: Managing Your Money $40,000 CD vs. $40,000 high-yield savings account vs. $40,000 money market account: Here's which will earn more now We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. .chip { background-image: url('/fly/bundles/cbsnewscore/images/chip-bgd/chip-bgd-moneywatch.jpg'); } By Matt Richardson Matt Richardson Sr. Managing Editor, Managing Your Money Matt Richardson is the senior managing editor for the Managing Your Money section for CBSNews.com. He writes and edits content about personal finance ranging from savings to investing to insurance.
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