Important points
A high-yield savings account allows you to easily withdraw money and get the best interest rate for your cash. However, that price could go down at any time. Instead, a CD guarantees an APY for a set period of time in the future, but requires you to commit to keeping the funds on deposit for the entire term. Now you can combine these two savings vehicles to create a lucky combination that pays you a whopping 5.50%, including 8 months of guaranteed interest on a portion of your money. With the Fed expected to lower interest rates this year and next, future savings and CD rates will almost certainly be lower than they are now. So consider locking in this great return before it’s gone.
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A one-two punch that delivers a 5.50% return.
For now, you can enjoy the benefits of both savings accounts and CDs while minimizing the drawbacks. The important thing is to assemble the combo. Allocate some of the cash you save to your savings bucket and the rest to one of today’s best CDs.
This can be done at any time. But now you are especially lucky. Because you can earn an amazing 5.50% on the nation’s top offer in both categories.
Pibank Savings Account: You can currently earn 5.50% on your Pibank Savings Account. You can open with any deposit amount (even no initial deposit), and there are no minimum ongoing balance requirements or monthly maintenance fees. Although Pibank is a relatively new online business, it is owned by Intercredit Bank, a brick-and-mortar company that has been FDIC-insured since 1984. Nuvision Credit Union 8 Month CD: Nuvision’s 8 Month CD is also 5.50%. You can only deposit up to $5,000 into this CD, but you’ll be locked in at a great rate until around July next year. Nuvision was founded in 1935 as a credit union for Douglas Aircraft and is headquartered in Huntington Beach, California. Membership is available to anyone nationwide.
This combo allows you to take advantage of each account type. Top-ranked high-yield savings accounts give you a great return on the cash you keep in the bank and allow you to withdraw your money whenever you need it. However, interest rates on savings accounts are variable and can be changed by your bank or credit union at any time.
On the other hand, certificates of deposit (CDs) have other benefits. The interest rate is fixed and the return is guaranteed for months or years in the future. However, to earn it, you must keep your money on the CD until the end of the period. If you withdraw early, you will be charged an early withdrawal penalty.
So, how much money can you make with this combo? Calculating CD interest rates is easy because the interest rate does not change during the eight-month period. All you need to decide is how much money you want to spend on CDs. See the table below to see eight months of earnings.
Guaranteed CD Interest Rate – Total Earned APY for 8 Months $1,000 Balance $2,000 Balance $3,000 Balance $4,000 Balance $5,000 Balance 5.50% $36 $73 $109 $145 $182 Nuvision’s CDs allow you to deposit between $1,000 and $5,000.
As for how much you’ll earn on a savings account, it’s not possible to calculate this accurately as the current 5.50% interest rate is not fixed and is likely to fall. This is because the US Federal Reserve (Fed) is expected to cut interest rates this year and next, leading to lower interest rates on savings accounts. So you’ll probably earn 5.50% for a month or two, then 5.25% for some months, then 5.00%, and so on.
Still, the table below will give you an idea of how much you can earn. Here’s how much you could earn in 8 months assuming various average APYs.
Variable Savings Account Interest Rate – 8 Month Earnings at Various APYs 8 Month Average APY $2,500 $5,000 $10,000 $15,000 5.25% $87 $174 $347 $521 5.00% $83 $165 $331 $496 4.75% $79 $157 $314 $471 4.5 0% $74 $149 $298 $447 Currently Pibank pays 5.50%. However, it is unlikely that these rates will continue for eight months. In fact, it will probably continue to decline.
There are many other options
These two accounts are not the only good options. Every business day, we rank the top 15 high-yield savings accounts, and today’s ranking includes 13 with yields of 5.00% or higher. We also offer many additional CD options at great prices. See below for information on choosing the CD term that best suits your financial situation.
Long CDs and their extended price guarantees are also wise at this time
The Fed is expected to continue lowering interest rates in 2024 and 2025. In fact, the overwhelming expectation among interest rate traders is that the Fed will cut rates by two quarter-points over the remainder of this year, followed by another cut next year. The Fed could even continue lowering rates through 2026. If this long-term sliding scale were to materialize, the interest rates earned on savings would be significantly lower over a year or two.
That’s why it’s better to stretch your CD out to a longer term (even a multi-year option) if your financial schedule allows it. By locking in a rate, such as a top-year CD paying 5.00% APY, you can ensure high returns until late 2025. However, you can take it even further by including a guarantee until 2026. The highest yield on a two-year term is 4.50% APY.
3-, 4-, and 5-year term CDs are also a smart choice. Indeed, the top rates range from 4.00% to 4.25%, which is lower than the rates for short CDs. But if the Fed lowers the benchmark rate by 2 percentage points over the next year, a promise of 4% or more through 2028 or 2029 would be a financial gift to your future.
Daily ranking of best CDs and savings accounts
Please note that the “best interest rate” quoted here is the highest interest rate available nationally, as determined by Investopedia in its daily interest rate survey of hundreds of banks and credit unions. This is significantly different from the national average, which includes all banks that offer CDs for that term, including many large banks that pay nominal interest. So while the national average is always very low, the best rates you can shop around and find are often 5, 10, or even 15 times higher.
How to find the best savings and CD rates
Every business day, Investopedia tracks interest rate data from more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide to determine a daily ranking of the highest paying accounts. To be on our list, a financial institution must be federally insured (FDIC for banks, NCUA for credit unions) and have a minimum initial deposit of $25,000 for the account. Must not be exceeded. You also cannot specify a maximum deposit amount less than $5,000.
To qualify as a nationally available bank, a bank must be available in at least 40 states. Additionally, some credit unions may require a specific charity or We ask that you donate to the association, but credit unions with contribution requirements of $40 or more are excluded. To learn more about how to choose the best rate, read our full methodology.
