$100,000 High-Yield Savings Beats Short-Term CD in Two of Three Scenarios

Putting $100,000 into stocks or other investments might work in normal times. But recent reports show many savers face a different reality. Inflation rose for a second straight month and hit its highest point in three years. Savers want to shield their cash. A six-figure investment once made sense, but now a high-rate savings account looks better.

Two solid choices stand out in the current high-interest environment: certificates of deposit, or CDs, and high-yield savings accounts. Short-term CDs lock money for just a few months. They let savers grab strong returns and adjust plans by year's end. High-yield savings accounts keep funds fully accessible, like regular savings accounts.

So which earns more on $100,000 this year, a short-term CD or a high-yield savings account? The numbers break down like this, based on top rates now. They assume the savings rate stays put, with no fees or penalties.

A three-month CD at 3.90% on $100,000 yields $961.06. The high-yield savings account at 4.03% brings $992.62 after three months. Winner: high-yield savings.

A six-month CD at 4.10% yields $2,029.41. The savings account at 4.03% gets $1,995.10 after six months. Winner: CD.

For a nine-month CD maturing early next year at 4.00%, the yield is $2,985.24. The savings account at 4.03% earns $3,007.52 after nine months. Winner: high-yield savings.

The high-yield account comes out ahead in two of three cases. Rate cuts loom as a risk, but the market does not reflect that yet. These estimates hold up for now. The gap between options stays small. Savers seeking locked-in returns might pick the CD. Early withdrawal penalties on a CD that size can add up, so check both options closely.