MMAs, CD, Savings, or Cash Reserve?

As of this writing, the highest-yielding account available is a 9-month CD provided by NASA Federal Credit Union, which offers 5.65% APY. The top high-yield savings and money market accounts also offer rates above 5.00%, while the best cash reserve account out of the ones we surveyed is Robinhood’s Gold account, with an APY of 4.65%.

This doesn’t mean, however, that all investors should rush to put their money into a CD simply because it comes out on top in this ranking. There are important distinctions between these accounts that may make some a better choice for you given your financial plans and needs.

Cash Reserve Accounts May Simplify Financial Dealings

Though brokerage cash management accounts have the lowest-ranking top yield among the account types listed above, some savers may find these accounts to be among the easiest to oversee. If you already have an account with a brokerage offering a competitive rate on a cash reserve account, the process for shifting your money to cash reserves may be very straightforward. On the other hand, if you don’t have a brokerage account already you may prefer another option that offers a higher yield.

Robinhood Gold subscribers currently receive the best yield among cash reserve accounts at 4.65% APY, but also pay a $5 per month fee. Only a small number of brokerages offer similar interest rates on cash management accounts, including Wealthfront’s cash management account, which pays 4.55%, and Betterment’s which pays 4.50%.

CDs Allow You to Lock in a Competitive Rate

A major benefit of CDs is that they allow savers to lock in a strong interest rate, guaranteeing returns at that level for the duration of the certificate’s term. CDs also allow the flexibility of a variety of term lengths, from months up to several years. On the other hand, many banks and credit unions will charge a hefty penalty fee for depositors who withdraw money from a CD before the term ends, so these accounts tend to be best for people who are comfortable leaving their money untouched for an extended time.

The best CD rates today range from 4.77% APY for a 5-year CD up to 5.65% APY for a 9-month CD from NASA Federal Credit Union. Regardless of the term, the top-paying CDs offer interest rates dramatically higher than the nationwide average, so it’s always best to confirm that the rate you’re getting is competitive.

High-Yield Savings Accounts Shatter the National Average Rate

The national average interest rate for savings accounts is a paltry 0.40%, thanks in large part to major nationwide banks that can offer low interest rates because they do not need to entice investors to provide deposit cash that can be turned around and loaned out. The top high-yield savings accounts provide a rate more than 10 times higher than the national average.

Savings accounts offer flexibility that CDs do not. You can withdraw your cash—or deposit more—as you see fit. Most high-yield savings accounts offer transfers between institutions taking no more than a few days, meaning that most savers find their funds easily accessible. However, savings account rates change frequently and without warning, often depending upon how the federal funds rate changes. So a high interest rate now does not offer any protection against a major drop in yield later on.

Money Market Accounts Give the Flexibility of Savings, But With Checks

Money market accounts have largely become interchangeable with savings accounts, with the primary difference being that they allow account holders to write checks while traditional savings accounts do not. Both types of accounts are good fits for savers who expect to withdraw or deposit cash repeatedly. However, like savings accounts, MMAs may change rates at any time, leaving savers exposed to a risk of a sudden drop in interest rate.

The national average interest rate for money market accounts is 0.59%, well below the top-paying MMA rate of 5.25% APY at Brilliant Bank. A total of 10 MMAs currently pay 4.50% APY or better.

Rate Collection Methodology Disclosure

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer money market, savings accounts, and CDs to customers nationwide, and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.