Full Article Link: CBS News – High-yield savings accounts vs. stocks: Which do experts recommend now?
Quote from Stephan Shipe
“CDs work best when you want to lock in current rates for a specific time period and don’t need liquidity. They’re ideal for intermediate-term goals — one to five years — where you want guaranteed returns higher than high-yield savings accounts but don’t want stock market risk.”
—Stephan Shipe, Founder of Scholar Financial Advising
Key Takeaways
- Cash allocation isn’t binary. You don’t have to choose just between stocks or a savings account. Certificates of deposit (CDs) can provide higher yields than high-yield savings accounts and far less volatility than stocks — especially valuable in uncertain environments.
- Interest rate trends matter. With the Fed expected to cut rates soon, locking in today’s higher CD rates may offer a smart way to secure a guaranteed return for the next 1–5 years.
- Time horizon is key. CDs work best for intermediate-term goals like tuition, a home down payment, or large purchases you plan for in the next few years — when you want to avoid risk, but still want better-than-cash returns.
- Don’t overlook liquidity needs. While stocks are technically liquid, market timing can work against you. CDs offer stable returns, but you give up access to your funds for a set term. A thoughtful balance between CDs, savings, and market investments can help you meet both short- and long-term objectives.