High-yield savings vs CD vs money market — comparison
Side-by-side comparison of HYSAs, CDs, and money market accounts across liquidity, rate structure, fees, insurance, and best-use scenarios.
Three deposit products serve overlapping needs and are easy to confuse: high-yield savings accounts (HYSAs), certificates of deposit (CDs), and money market deposit accounts (MMAs). All three are FDIC-insured at participating banks (or NCUSIF-insured at participating credit unions); all three are interest-bearing; all three are commonly available from both legacy and online institutions. They differ in liquidity, in rate structure, and in transactional features. The right choice depends on what the money is being held for.
| Attribute | High-Yield Savings (HYSA) | Certificate of Deposit (CD) | Money Market (MMA) |
|---|---|---|---|
| Liquidity | High — funds available via ACH transfer within 1–3 business days; some banks allow same-day. | Low — funds locked until maturity; early withdrawal triggers an interest penalty. | High — funds available via ACH transfer; some MMAs add limited check-writing and debit access. |
| Rate structure | Variable APY; bank can change at any time. Often the most competitive ongoing rate for liquid cash. | Fixed APY for the term. Once opened, rate doesn't change. | Variable APY, often tiered by balance. Bank can change at any time. |
| Typical minimum to open | Often $0; some banks require $25–$100. | Varies; common floor $500–$2,500. "Jumbo" tiers may start at $100,000+. | Sometimes higher than HYSA — $1,000–$10,000 ranges are common. |
| Fees | Usually no monthly fee; some banks impose dormancy fees. | Rarely any maintenance fee; early-withdrawal penalty if broken. | Often a monthly fee unless minimum balance or other waiver condition is met. |
| Transaction limits | Federal Reg D six-per-month limit was suspended in April 2020; banks may still impose voluntary limits. | No periodic withdrawal — single transaction at maturity (or early, with penalty). | Same post–Reg D environment; some MMAs add check-writing or debit-card limits. |
| Insurance | FDIC (banks) or NCUSIF (credit unions), $250k per depositor per institution per ownership category. | Same as HYSA. Brokered CDs aggregate against the issuing bank's per-depositor limit. | Same as HYSA — when the product is a bank MMA, not a money market mutual fund. |
| Tax reporting | Interest reported on Form 1099-INT if $10+/year from the institution. | Interest taxable annually as it accrues (in taxable accounts); 1099-INT each year. | Same as HYSA. |
| Sign-up bonuses | Common; flat cash bonuses or intro APYs. | Less common; occasionally a cash bonus on top of the stated APY. | Occasional; often paired with a checking-account opening. |
When to choose a HYSA
HYSAs are the right default for cash that needs to stay liquid: emergency funds, short-term savings goals, working buffers. The competitive end of the HYSA market typically pays close to or above the rate on short-term Treasuries and tends to track the Fed's policy rate within a few weeks. The rate is variable — the bank can lower it — but in a stable or rising-rate environment, the lag in upward adjustment is usually short.
HYSAs lose against CDs when the yield curve is steep and the cash genuinely won't be needed for the CD's term. They lose against MMAs only when the MMA offers a feature (check-writing, debit access) that the HYSA can't match.
When to choose a CD
CDs are right for cash with a known time horizon longer than the lock-up: a planned purchase 12–24 months out, an allocation in a retirement portfolio designed for stability, a chunk of an emergency fund that you're willing to keep behind a partial gate in exchange for a higher fixed rate. The CD wins if and only if its APY plus any sign-up bonus exceeds the rate you'd otherwise earn on the same money over the same period.
CDs lose against HYSAs when the yield curve is flat or inverted (the CD's term premium has compressed) or when rates are likely to rise materially over the CD's term (you're locked at a below-market rate until maturity).
Laddering CDs is a way to capture term premium while preserving annual liquidity — see our CD laddering guide.
When to choose an MMA
MMAs make sense when you specifically want a HYSA-like product with check-writing or debit access — for example, paying occasional large bills that need to come out of a savings buffer without a transfer-and-wait cycle. They also fit when a particular bank's tier structure delivers a better effective APY at your specific balance than a comparable HYSA.
MMAs lose against HYSAs when the rate is no better (or worse), the minimum balance requirements are higher, or monthly fees apply that the HYSA doesn't impose. MMAs lose against CDs when you have a known long horizon and the CD's fixed yield is meaningfully higher.
Choosing between two when both fit
For the in-between cases:
- HYSA vs MMA at the same bank. If the APYs are similar and you don't need the MMA's check-writing or debit access, the HYSA is usually simpler. If you need the access, choose the MMA.
- HYSA vs CD with a 6–12 month horizon. Compare the CD's locked APY to a reasonable projection of the HYSA's variable APY over the period. The HYSA's flexibility is worth something — usually 25–50 basis points of equivalent yield.
- CD vs CD ladder. A single long-term CD captures the full term premium but locks all the cash. A ladder spreads the risk and provides annual liquidity at the cost of lower average yield in the early years. The ladder shines once you're at steady state.
- MMA vs short-term Treasury. Treasuries are state-tax-exempt at the federal level, which can favor them over an MMA at the same gross yield for residents of high-tax states. Compare on after-tax yield for your bracket.
Combined use
The three products aren't mutually exclusive. A common shape: a HYSA for the emergency fund and short-term goals, a CD ladder for the cash component of a longer-term portfolio, and an MMA only where its features (or rate at a specific balance) actually justify it. Sign-up bonuses on any of the three can supplement the underlying yield in a small but real way; the methodology for evaluating them is on our methodology page.