Will a CD or a high-yield savings account be better to open after the Fed's rate hike?

For the first time since the summer of 2023, the Federal Reserve raised interest rates on Wednesday. The central bank's benchmark interest rate now sits at a range from 3.75% to 4.00%. That's a stark reversal from what Americans saw in September 2025 and in September 2024, when the Fed actually cut rates both times. And it means that the approach both borrowers and savers have had in recent years may no longer work, particularly if Wednesday's latest rate hike is the first of a series, as it may be if inflation doesn't cool again.

Against this backdrop, savers should be looking for viable ways to protect their money and grow their interest while taking minimal risks. Two savings accounts, in particular, can help accomplish those goals. Certificates of deposit (CDs) and high-yield savings accounts, for example, merit serious consideration right now. If you were to only choose one, however, which is likely to be better to open after the Fed's latest rate hike? That's what we'll examine below.

Start by seeing how much interest you could be earning with a CD account here.

CDs and high-yield savings accounts offer similar benefits to savers, but they won't operate in identical ways. 

CDs, for example, have fixed interest rates that won't change even if the interest rate environment rises or falls. High-yield savings accounts, meanwhile, have variable rates that will be responsive to market changes. But that's actually a good thing for savers now. If you had a high-yield savings account before this week's Fed rate hike, for example, you likely will see a slightly higher rate and bigger return on your next statement. And you'll continue to see that sort of activity in the weeks and months ahead if the Fed continues its interest rate hiking campaign. 

CDs, however, won't be able to take advantage of this, and savers shouldn't be surprised to see that the "higher" CD rate they lock in now ultimately turns out to be the lower one compared to what a high-yield savings account is able to offer by the end of 2026 or in early 2027. So, if you want to be positioned to earn as much interest as you can right now — and are confident that Wednesday's rate hike isn't an anomaly but instead the first of a series of hikes — then a high-yield savings account is likely the better account to open now.

That said, for some savers, a CD can still make sense. A fixed rate allows savers to take a relaxed approach knowing that their money is protected and their interest is guaranteed in a way that it won't be with a high-yield savings account. And, if you lock in a high, long-term CD rate now, there's a good chance that it will eventually become the more profitable account option, even if that's not likely in the immediate future. 

Don't discount the benefits of splitting your money between both account types, either. While that may not be advantageous for savers looking to streamline their banking needs with a singular account, it can be worth it for those who want to earn a fixed rate while still being positioned to earn more interest as the Fed raises rates again (which could occur as soon as October). 

Consider, then, using the services an online marketplace provides. These list rates, lenders, terms and conditions all in one easy-to-navigate location that can make opening an account simple and quick. By leveraging a marketplace, you can ensure that the account you ultimately open is the one with the highest rate and best terms.

Learn more about your savings account options online today.

The bottom line

There is no universal answer for savers pondering whether a CD or high-yield savings account is the right choice for them now, after the first interest rate hike from the Federal Reserve in more than three years. For those who want to be able to exploit this rate hike and potential others, a high-yield savings account could make more sense, but for others, a CD, with its fixed rate and reliable return, could be better. Evaluate both with precision and don't dismiss the advantages of opening each, especially now with interest rates in flux and the potential to earn more on your money significantly higher than it was just a year ago.