High-Yield CDs Can Offer High Rates and Safety in a Risky Economy

• Stock market volatility spurred by President Donald Trump’s tariff plans has made investing risky.
• Opening a high-yield CD can help you lock in high interest without worrying about losing money.
• No-penalty CDs can help you avoid early withdrawal penalties in case of emergency withdrawals.

President Donald Trump’s tariff plans have led to some stock volatility this week. This has made investing a riskier option as stock prices respond unpredictably to tariff renegotiations, and fears of a recession rise.

If you want to lock in a good interest rate without the risk that comes with investments, a CD can be a good choice. The best CD rates nationwide sit between 4.20% and 4.60% APY, and once you open one, the rate won’t change until the end of the CD’s term length which could months or years from now.

Traditional CDs lock in both your interest rate and your funds

CDs are a type of bank account. Like savings accounts, they’re generally federally insured accounts that give you interest based on the money you have in the account. That means you’ll be able to get returns off of your savings without having to worry about losing your money like you might with a brokerage account.

Most CDs will be insured by the FDIC if you’re opening a CD with a bank or the NCUA if you’re opening a CD with a credit union. Both types of insurance will cover up to $250,000 for a single depositor and $500,000 for a joint bank account.

If you would like to put more than $250,000 in a CD, you might want to use CDARS CDs. CDARS stands for the Certificate of Deposit Account Registry Service, and it lets you increase your FDIC coverage, potentially into the millions of dollars. It does this by dividing your money between several different banks, with each providing the standard amount of FDIC insurance.

Just keep in mind that this service might come with fees depending on where you go.

Unlike high-yield savings accounts, CDs offer a fixed interest rate. That means that until the CD’s term length ends, you’re guaranteed to earn the same interest rate that you opened the account with.

Unfortunately, this perk comes with a big drawback. With traditional CDs, you aren’t just locking in a high interest rate; you’re also locking your funds away for that CD’s term length. For the next few months or years, you won’t be able to access your funds without paying heavy early withdrawal penalties.

If you’re prepared to lose access to your funds, CDs can still be a great deal. We’ve provided a list of some of the highest-paying CDs currently available from online banks and credit unions nationwide to help you choose the right option for you.

No-penalty CDs let you earn good rates without worrying about emergencies

If you think there’s a chance you’ll need to withdraw your money before the end of the term length, you still have CD options. No-penalty CDs let you withdraw your money at least once before the end of the term length without paying early withdrawal penalties.

In exchange, no-penalty CDs tend to offer slightly worse rates than their traditional counterparts, although you can still find no-penalty CDs offering over 4% interest.You’re more likely to find 3-month and 6-month CDs with no early withdrawal penalties than 3-year or 5-year CDs, though.

Read all of the CD’s terms before you open the account. Many no-penalty CDs only let you withdraw once or twice without penalty before the end of the term length, and some require you to withdraw the CD’s entire balance, effectively closing the CD early. You might still need to limit how many withdrawals you make.

Here are some of the highest no-penalty CDs currently available nationwide.

Other options for locking in a good rate

If CDs don’t interest you, but you still want to lock in a good interest rate, bonds might be a good choice for you. When you buy a bond, you’re buying debt that the debtor promises to pay back with a certain amount of interest. While this comes with a certain amount of risk, things like treasury bonds can be a low-risk way to lock in a good rate.

Bonds tend to be longer-term than CDs, and can mature up to several decades in the future. If you have a long-term goal you’re aiming for, they could be a better fit for your savings goals.