The best certificates of deposit are still paying above 5% in some corners of the market, even as the Federal Reserve holds its benchmark rate steady.
That gap between what a CD can earn and what the average savings account pays has rarely looked this wide.
According to recent rate surveys, top-yielding 12-month CDs sit in the mid-4% to low-5% range, while the national average savings account hovers near 0.4%.
On a $10,000 balance, that difference is roughly $450 a year — real money that many households are simply leaving on the table.
The reason comes down to how banks set deposit rates.
When the Fed pushed rates higher to fight inflation, online banks and credit unions competed aggressively for cash.
Traditional brick-and-mortar banks, sitting on a pile of existing deposits, felt little pressure to follow.
That split is why two savers with identical balances can earn wildly different returns.
Meanwhile, the same inflation that made CD yields attractive also ate into paychecks.
Grocery bills, rent, and insurance premiums climbed faster than most wages for much of the past three years.
A 5% CD sounds impressive until you compare it to the 20%-plus interest many credit cards now charge.
Carrying a balance while holding a CD is a losing trade almost every time.
A CD locks your money for a set term in exchange for a fixed rate.
If you have cash you won't touch for six to twelve months, locking in today's yields protects you from the rate cuts many analysts expect later this year.
If you might need the money sooner, a high-yield savings account offers similar rates with far more flexibility — usually at a slightly lower yield.
Some of the highest advertised rates come with minimum deposits, limited withdrawal windows, or automatic renewal terms that quietly roll your money into a much lower rate when the term ends.
Set a calendar reminder before any CD matures.
Also worth noting: rates vary by term in ways that don't always make sense.
Occasionally a 6-month CD pays more than a 5-year, a quirk that reflects banks hedging their own bets on where the Fed goes next.
It pays to compare across several institutions rather than accepting the first offer from your current bank.
The bigger picture is that savers finally have leverage again after years of near-zero returns.
Using it well — matching the term to when you actually need the cash — can turn a boring account into one of the better financial moves available right now.
Our take: if you're holding idle cash and carrying no credit card debt, locking a portion into a top-tier CD is a reasonable, low-drama move.
Final Thoughts
Just don't chase the single highest headline rate at the expense of liquidity you might need.