CD vs. high-yield savings account: Which is better to open this August?

The start of a new month is always a smart time for savers to revisit their financial health. What was working in the weeks and months prior may no longer be and a shift could be required. That's especially true as savers head into August 2026. With inflation still sticky, the chances of a Federal Reserve rate increasing for when the central bank meets again in September and the need for flexibility and a higher-interest earning account pronounced right now, savers have much to contend with. Fortunately, there are two specific savings accounts that can effectively (and lucratively) help them navigate through this economic landscape.

A certificate of deposit (CD) and high-yield savings account both come with an interest rate that outpaces inflation. Both are readily accessible (online banks offer multiple attractive options) and both will protect your principal while growing your interest. That said, they do work differently and the pros and cons associated with each will not be identical. It's critical, then, to understand each before getting started, especially with a CD as it will require you to freeze your money in the account or pay a fee to regain access.

Between a CD and high-yield savings account, then, which will be better to open this August? That's what we'll consider below.

Start earning more interest on your money with a high-yield savings account.

CD vs. high-yield savings account: Which is better to open this August?

There's no universal answer to this question, especially in today's financial landscape. For some savers, a CD will be the best option while, for others, a high-yield savings account will be, while a third group could benefit from opening both. Here's how to determine which makes the most sense for you now:

Why a CD account could be better to open this August

CD accounts differ from high-yield savings accounts in a key way – they have fixed interest rates that won't change based on market conditions. So, if you want to preserve today's status quo, consider locking in one of today's elevated CD rates this August. This will allow you to earn an elevated rate for months or potentially even years, all while the high-yield savings account rate fluctuates. 

Today's market can be unpredictable but with a CD account you'll know exactly how much interest you'll be earning and when that interest will be available to you. That security and peace of mind is always worth something but especially so now. And remember, it wasn't that long ago that CD interest rates were barely over 1%. Now, however, you can lock one in around 4% for multiple years. In other words, if you want predictability, security and a sizable return on your money, a CD account could be the better type to open this August.

Get started with a CD online here.

Why a high-yield savings account could be better to open this August

For savers anticipating a rate hike later this year or for those who want to maintain access to their money, a high-yield savings account could be the better option this August. According to the CME Group's FedWatch tool, there's around a 60% likelihood that the Federal Reserve increases rates at its September meeting. That will almost certainly lead to an increase in the rate you're earning with a high-yield savings account, unlike the CD rate which will remain fixed. 

That increase could come even before the Fed formally takes action, too, as banks preemptively adjust the rates they provide to savers. And, unlike the CD, you can take advantage of this higher rate by depositing more money into the account as the access won't be restricted. So, if you want to be positioned to earn a higher rate in the weeks and months ahead while still being able to move your money around as needed, the high-yield savings account could be the better option this August.

The bottom line

Both CDs and high-yield savings accounts have unique features that can be leveraged in today's economic landscape. Don't discount the benefits of opening both in August, too. Just be sure to keep the money in your traditional savings account minimal (or consider closing it altogether as it only has an average 0.38% rate currently). And with online marketplaces incorporating multiple lenders, rates, terms and more in a single location, it's easy to compare your CD and high-yield savings account options now and, more importantly, start earning more interest on your money in the new month.

Edited by Angelica Leicht