Chose a high-interest savings account over a CD last year and I'm still second-guessing it

I had $8,000 sitting around and couldn't decide between a 5% APY CD locked for 12 months or a 4.5% HYSA with no lock-in. I went with the HYSA because I was worried I'd need the cash, but rates dropped a bit since then and I keep wondering if locking in would've been smarter. Anyone else deal with this kind of FOMO on savings choices?

3 comments

3 Comments

taylor121mo ago

Yeah, I get that. A buddy of mine put $10,000 into a 12-month CD at 5% right before rates started dropping, and he's been smug about it ever since. But he also had to cash out early for a car repair and lost three months of interest to the penalty, so it wasn't all wins.

taylorc401mo ago

Right, and that penalty is killer because you basically get nothing for locking your money up if life gets in the way.

gavinb971mo ago

My coworker Sarah put $6,000 in a 5% CD last July and bragged about it for months. Then her water heater burst in October and she had to break the CD early, losing almost all the interest she had earned. She ended up with less than if she had just used a regular savings account the whole time.