When is a CD better than a HYSA?

CDs offer rate certainty for the term — ideal when you believe rates will fall and want to lock in a high rate. HYSAs offer flexibility with no early withdrawal penalty but rates fluctuate with the federal funds rate.

What is the early withdrawal penalty on a CD?

Typically 60-360 days of interest depending on the term. On a 1-year CD, the penalty is often 3 months of interest. Breaking a CD early can still be worthwhile if rates have dropped significantly.

Are CDs and HYSAs taxed the same?

Yes — both generate ordinary income taxable in the year received for HYSAs or year the CD matures. Interest from both is reported on Form 1099-INT.

CD vs High-Yield Savings Account Comparison

Compare total after-tax return of a certificate of deposit (CD) versus a high-yield savings account (HYSA) given rate, term, and tax bracket.

Principal ($)

Annual Rate (%)

Years

Compounding / Year

$ Finance Disclaimer: These calculators are for educational and illustrative purposes only. Results do not constitute financial advice. Consult a licensed financial advisor before making investment or borrowing decisions.

How to Use

Enter the values for the scenario you are assessing. Compare total after-tax return of a certificate of deposit (CD) versus a high-yield savings account (HYSA) given rate, term, and tax bracket. Use the cd vs hy savings result to inform your calculation.

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Frequently Asked Questions

When is a CD better than a HYSA?

What is the early withdrawal penalty on a CD?

Are CDs and HYSAs taxed the same?