Money Market vs HYSA vs CD Calculator

All three are FDIC-insured deposit accounts but with different features. High-yield savings accounts (HYSA) offer full liquidity: withdraw at any time without penalty, though rates are user-provided. Money market accounts also offer liquidity and typically pay rates comparable to HYSA, but may include check-writing features. Certificates of Deposit (CDs) lock your money for a fixed term (3 months to 5 years) and charge penalties for early withdrawal, typically forfeiting 90 days of interest. CDs usually pay higher rates in exchange for locking your money.

It depends on your time horizon and risk tolerance. If you need access to your money within six months, a CD penalty could erase the benefit of a higher rate. For near-term goals or emergency funds, HYSA offers the best combination of competitive rates and full liquidity. For money you do not need for 1-5 years, a CD often pays enough higher rate to justify the lock-in period. This calculator shows all three options so you can compare total balance at your time horizon.

CDs impose early withdrawal penalties, typically forfeiting 90 days of interest on short-term CDs (3-6 months). Longer-term CDs may penalize one year's worth of interest. The penalty reduces your final balance. For example, if you open a $25,000 CD at 5% for 12 months but need the money after 6 months, you lose roughly $625 in penalty and earn only $625 in interest, netting zero. This is why liquidity matters: if you might need the money, HYSA is safer.

Yes, all three products at FDIC-insured banks (and credit union equivalents at NCUA-insured credit unions) are protected up to $250,000 per depositor, per bank, per ownership category. The insurance covers principal and accrued interest. If your balance exceeds the limit, spread funds across multiple banks. This calculator assumes all three accounts are at FDIC-insured institutions.

Choose a CD term that matches your time horizon. If you need the money in 12 months, a 12-month CD makes sense. If you need it in 6 months, a 6-month CD is safer. Longer-term CDs (3-5 years) often pay higher rates but lock your money for longer. You can also build a CD ladder: open multiple CDs with staggered maturity dates so portions of your money mature at intervals, giving you periodic liquidity.

Once you open a savings account or HYSA, the rate may change based on Federal Reserve policy and bank competition. Rates for existing deposits can go up or down. CDs are different: your rate is locked in for the entire term. If rates rise, your CD earns the original rate, which is now below market. If rates fall, your locked-in rate looks good. This lock-in is both a benefit and a risk depending on where rates move.