Phase 4 · General Utility
CD vs High-Yield Savings Calculator
Lock the rate or keep the liquidity? Set your deposit, both rates and where you think savings rates are heading — then see which account leaves you with more, and what you trade for it.
Under the hood
The math, fully exposed
The CD compounds a locked rate; the savings account drifts and compounds monthly:
CD value = deposit × (1 + CD APY)term ÷ 12
Savings rate in month m = max(0, current APY + drift × m ÷ 12)
Each month: balance = balance × (1 + monthly rate)
Difference = CD value − savings value
- The CD is a bet against falling rates: lock a fixed rate and you win if the savings account drifts below it — and lose flexibility either way.
- Liquidity has value the math omits: the HYSA lets you move cash freely; a CD's early-withdrawal penalty isn't shown here but is real.
- Both are taxed the same: interest is ordinary income, so the comparison is apples-to-apples before tax.
Your directives
What to do next, based on your numbers
Adjust the sliders to generate tailored recommendations.
Answers
Frequently asked questions
What is the real trade-off between a CD and high-yield savings?
A certificate of deposit locks a fixed rate for a set term, so it protects you if rates fall — but your cash is tied up and early withdrawal triggers a penalty. A high-yield savings account (HYSA) stays fully liquid and its rate floats: great when rates rise or hold, painful when they drop. The choice is really a bet on where rates are heading and how soon you might need the money.
When does locking a CD actually pay off?
When rates are expected to fall. If your HYSA pays 4.25% today but drifts down to 3% over the next two years, a 24-month CD locked at 4.5% quietly pulls ahead — you kept the high rate while the savings account followed the Fed down. This calculator lets you set that rate drift to see the crossover. If rates hold or rise, the liquid HYSA usually wins.
How is the high-yield savings return modeled here?
We start at your current HYSA rate and adjust it each year by the drift you set, compounding the balance monthly along the way (with the rate floored at 0%). The CD simply compounds its locked APY for the full term. Both ignore taxes — interest from each is taxed as ordinary income — and any CD early-withdrawal penalty, which only bites if you break the term early.
Can I get the best of both?
Often, yes — with a CD ladder. Splitting your cash across CDs maturing at staggered intervals keeps part of it accessible regularly while still locking rates on the rest. Pairing a ladder with a liquid HYSA emergency buffer captures most of the upside of each. Match the structure to when you will actually need the money. This is an educational model, not financial advice.