Quick answer
This calculator compares a high-yield savings account with a CD on the same deposit, before and after tax. On $25,000 over 3 years, a 5.0% CD grows to $29,037 and a 4.6% high-yield savings account to $28,692 — the CD pays about $345 more, in exchange for locking the money up.
How the High Yield Savings & CD works, step by step
Enter the deposit, the CD's APY, the savings account's APY, the term, the compounding frequency and your marginal tax rate. Both products use the same frequency, so the comparison is clean. A third bar shows a regular 0.5% savings account on the same deposit, which prices the decision to move the money at all, not just the choice between the two better options.
Interest on both products is taxed as ordinary income in the year it is credited, including inside a CD you cannot touch yet. The calculator shows each product's earnings before tax and after tax at your marginal rate, as a flat reduction on the total interest. That is a simplification: in reality the tax is due year by year, which slightly reduces the compounding, so the after-tax figures are close estimates rather than exact.
The decision is rarely the headline rate. A CD wins when its rate premium is real and you will not need the money early — early-withdrawal penalties, commonly 3 to 12 months of interest, erase the advantage quickly. On the worked example, a 6-month penalty at 5% costs $625, which wipes out the CD's $345 edge and leaves you worse off than the savings account.
Savings wins when the money is an emergency fund or a near-term purchase, and when rates are rising: the savings rate follows the market up while the CD is stuck at its locked rate. In November 2026 top high-yield accounts paid about 4.2% to 4.4% APY while jumbo CDs reached up to 4.85% — a premium of under half a point, which rarely compensates for losing access for years.
Both products carry the same federal insurance: FDIC coverage up to $250,000 per depositor, per bank, per ownership category, with credit union accounts covered to the same limit through the NCUA. If the choice feels close, a CD ladder — splitting the deposit across CDs of different terms so one matures every year — averages the rates on offer and restores regular access to part of the money.
The formula
Value = Deposit × (1 + APY/n)^(n×t), where n is the compounding periods per year and t the term in years. After-tax earnings = earnings × (1 − marginal tax rate).
Worked example — try it on the calculator above
Worked example: $25,000 for 3 years, CD at 5.0% vs savings at 4.6%
With monthly compounding, the CD reaches $25,000 × (1 + 0.05/12)^36 = $29,037 and the savings account reaches $25,000 × (1 + 0.046/12)^36 = $28,692. The CD's edge is $345 over 3 years. At a 22% marginal tax rate, the CD's $4,037 of interest keeps $3,149 after tax and the savings account's $3,692 keeps $2,880 — the ranking does not change. Against a regular 0.5% account, which reaches only $25,378, the better option earns an extra $3,659, which is the real prize in this comparison.
Frequently Asked Questions
What is the penalty for breaking a CD early?
It is set by the bank: commonly 90 days of interest on terms under a year, and 6 to 12 months of interest on longer terms. The penalty can eat into principal if you withdraw very early. Brokered CDs work differently — you sell them on a market, possibly at a loss, rather than paying a bank penalty.
Are CDs and high-yield savings accounts insured?
Yes, both are deposit accounts. FDIC insurance covers up to $250,000 per depositor, per bank, per ownership category; credit union accounts carry the same limit through the NCUA. Balances above the limit at one bank are uninsured, so large deposits should be spread across banks.
When does a high-yield savings account beat a CD?
When rates are rising (the savings rate follows the market up while the CD is stuck), when you may need the money, or when the CD's rate premium is small. A premium under about half a percentage point rarely compensates for losing access for years — in November 2026 the gap between top savings and jumbo CD rates was about that size.
What is a CD ladder?
Splitting a deposit across CDs of different terms — for example 1, 2, 3, 4 and 5 years — so one matures every year. It averages the rates on offer and restores regular access to part of the money, reducing both lock-in and reinvestment risk. Each maturing rung can be spent or rolled into a new 5-year CD.
Estimates, not advice. This calculator provides educational estimates based on the inputs you enter and the assumptions shown on this page. It is not financial, tax or investment advice, and it cannot see your full situation. Verify important figures against official sources, and consider a qualified professional for decisions about your own money. See our Disclaimer and Methodology.