Why I won’t take my money out of my high yield savings account, no matter how much the rates go down

Savers haven’t had much to celebrate lately. Rates on high-yield savings accounts and certificates of deposit (CDs) have fallen sharply following the Federal Reserve’s September 18 cut of half a percentage point. And experts predict two more cuts in the next two months.

Some people flock to CDs as a way to lock in the 4.00% APY while it’s still available. But I’m sticking with my high-yield savings account even though I know I’ll earn less and less interest as time goes on.

Interest isn’t the only value a bank account can offer

The biggest deciding factor for most people, myself included, when choosing between a high-yield savings account and a CD is not the interest rate. It’s accessibility.

Savings accounts allow you to withdraw your money as needed, although some limit you to six penalty-free withdrawals per month. There is usually no limit on how many deposits you can make.

Our picks for the best high-yield savings accounts of 2024

American Express® High Yield Savings APY 4.10% Fee information Circle the letter I. Annual percentage yield of 4.10% to October 15, 2024 Member of the FDIC.	APY 4.10% Fee information Circle the letter I. Annual percentage yield of 4.10% to October 15, 2024	Min. to win $0
Capital One 360 ​​Performance Savings APY 4.10% Fee information Circle the letter I. Check the Capital One website for the most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of September 27, 2024. Rates are subject to change at any time before or after account opening. Member of the FDIC.	APY 4.10% Fee information Circle the letter I. Check the Capital One website for the most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of September 27, 2024. Rates are subject to change at any time before or after account opening.	Min. to win $0
CIT Platinum Savings APY 4.70% APY on balances of $5,000 or more Fee information Circle the letter I. 4.70% APY on balances of $5,000 or more; otherwise, 0.25% APY Min. to win $100 to open an account, $5,000 for max APY Member of the FDIC.	APY 4.70% APY on balances of $5,000 or more Fee information Circle the letter I. 4.70% APY on balances of $5,000 or more; otherwise, 0.25% APY	Min. to win $100 to open an account, $5,000 for max APY

CDs, on the other hand, usually require you to give up access to your funds for the full life of the CD. If you withdraw your money early, you will have to withdraw it all at once. You’ll lose any interest you would have earned for the remainder of the term and likely pay a penalty equivalent to several months of interest payments.

For me, the affordability of a savings account is too valuable to pass up, even with higher interest rates. I keep my money in a Discover® online savings account so I can access it anytime. Even though I know their rates will drop from the 4.10% APY I’m earning now, I’ll still be earning a rate well above the national average. If you want a competitive rate with no access limitations, check out the Discover Online Savings account.. Those who open an account with promo code TMF924 before March 13, 2025, could earn up to $200 as a sign-up bonus, depending on how much they deposit into the account.

Now is the time to switch to a high-yield savings account

Just because I’m keeping my money where it is doesn’t mean it’s the right decision for you. If you’re still trading with a brick-and-mortar institution that pays you 0.01% APY, you can definitely do better. No matter how much interest rates drop in the coming months, you’ll come out ahead by making the switch to a high-yield savings account.

In addition to offering higher APYs than traditional savings accounts, high-yield accounts with online banks are also known for their lack of common bank fees. This can help you save money compared to a brick-and-mortar savings account that charges you every month to own the account.

You don’t have to cut ties with brick and mortar banks forever if you’re not comfortable. You may prefer to maintain a traditional checking account so you can access cash as needed. You should be able to link this to your high-yield savings account, so you can easily transfer funds between them.

I mentioned the Discover® Online Savings Account above, but if you don’t think it’s right for you, there are plenty of other options. Check out our favorite high-yield savings accounts that can help you start growing your wealth.