What are the differences between high-yield savings accounts and CDs?

What are the differences between high-yield savings accounts and CDs?

High-yield savings accounts offer flexibility and liquidity, while CDs (Certificates of Deposit) typically provide higher interest rates but require you to lock in your money for a set term.

Which one is better for saving for a short-term goal?

For short-term goals, a high-yield savings account is usually better because you can access your funds anytime without penalties.

What about for long-term savings?

For long-term savings, CDs might be more beneficial due to their higher interest rates, but you need to be comfortable with not accessing the funds until the term ends.

Are there any risks associated with either option?

High-yield savings accounts are generally low-risk, while CDs are also safe but can incur penalties if you withdraw early. It's important to consider your financial goals.