With an Extra $10,000, Twice as Many Readers Would Opt for CDs over Savings

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Key Takeaways

  • When asked where they would put an extra $10,000, surveyed Investopedia readers have grown increasingly fond of CDs this year, preferring them to cash savings by a two-to-one margin in the latest survey.
  • A little over a year ago, the sentiment was reversed, with far more readers preferring cash savings.
  • The appeal of CDs has been driven by rates surging to historic highs this year, with the best CD rates recently reaching above 6%.
  • Returns on the best high-yield savings account rates have also skyrocketed this year—but unlike CDs, the rate on a high-yield savings account can drop at any time.

Readers Shifted Their Preference From Savings to CDs in Early 2023

In each installment of the Investopedia reader survey, conducted bimonthly with subscribers to Investopedia's daily newsletter, readers are asked where they would likely put an extra $10,000. The number of respondents has ranged from around 700 to 1,200 for each survey. A little over a year ago, 20% of respondents indicated they would choose to put cash in savings, with just 8% saying they'd prefer a CD.

But the preference for savings began declining as the interest in CDs picked up, and by March 2023, far more readers reported they would put an extra $10,000 in a CD. That split peaked with the September survey, when three times as many readers said they would choose a CD over cash savings.

The gap narrowed a bit in the most recent survey, released November 6. But the margin is still robust, with readers showing a two-to-one preference for CDs over cash savings.

CD Rates Have Skyrocketed to Historic Highs

It's not surprising that 2023 has seen a burgeoning interest in CDs. That's because the Federal Reserve's aggressive campaign against decades-high inflation has pushed bank deposit rates to historic highs. The best CD rates have surged throughout this year, with the leading nationwide rate reaching above the 6% threshold in recent weeks. Rates have come down a bit since—with the current top rate down to 5.80% APY. But CD returns are still paying record rates, the likes of which we haven't seen in 20 years.

High-Yield Savings Accounts Pay Well, but Will Decline

Savings account rates have also shot higher in 2023, with the best high-yield savings accounts currently paying between 5.25% and 5.40% APY. While these accounts are appealing at those rates, readers with an extra $10,000 likely understand the benefits of a CD over a savings account in this rate environment. When CD rates are exceptionally high (like they are now), but interest rates are expected to fall in the not-too-distant future (as many predict in 2024), CDs offer the ability to lock in today's great rates but enjoy them many months or years into the future. In contrast, when interest rates start to decline, savings account rates will begin to drop as well.

Still, high-yield savings accounts are a great option for some of your savings, and the growth in their rates has been remarkable. Less than two years ago, the very highest rate available on a nationwide savings account was a paltry 0.70% APY. Today, dozens of options pay above 5.00%.

Rate Collection Methodology Disclosure

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.