High-Yield Savings vs. CDs vs. Treasury Bills: Where Should Cash Go?

If you may need the money tomorrow, start with an insured high-yield savings account. If you know the date, compare a CD or Treasury bill that ends near that date. A money market fund can work for cash already at a brokerage, but it is an investment. It is not an insured bank account.

The best choice starts with one question: When must the money be ready?

For an emergency fund, the answer is usually "any day," so an insured, easy-access account is the best place to keep that savings. For a known bill, a CD or Treasury bill can pay more.

High-yield savings vs. CDs vs. Treasury bills

When you may need the cash | Compare first | Why it may fit | Main catch
Any day | High-yield savings or money market account | Easy bank access and deposit insurance when eligible | The bank can change the rate
On a known date | Bank CD | The rate is often fixed for the term | Early withdrawal may cost interest
On a known date within one year | Treasury bill | Short terms and no state or local income tax on the interest | Selling early can cause a loss
While it sits at a brokerage | Money market fund | Usually easy to sell on a business day | No FDIC or NCUA insurance
Not for at least 12 months | Series I savings bond | The rate includes an inflation part | One-year lock and an early cash-out penalty

Rates change. Match the account to the date the money must be ready. Sources: FDIC and TreasuryDirect, checked July 27, 2026.

What is actually insured?

An eligible savings account, money market account, or bank CD can have federal deposit insurance. The bank must be FDIC-insured. A federally insured credit union uses NCUA coverage.

The standard FDIC limit is $250,000 per depositor, per bank, per ownership type. Accounts in the same ownership type at the same bank are usually added together. Opening three savings accounts at one bank does not create three separate limits.

Check the real bank behind an app. Do not trust the app name alone.

High-yield savings is built for access

A high-yield savings account is still a savings account. "High-yield" only means it pays more interest than many basic accounts.

It can fit an emergency fund because there is no set end date. You can move money when you need it, subject to the bank's transfer rules.

The tradeoff is the rate. It can rise or fall after you open the account. Check:

whether the rate is a short promotion;

the balance needed to earn it;

monthly fees;

how long a transfer takes;

whether the bank is FDIC-insured.

APY means annual percentage yield. It shows the interest you could earn over one year if the rate stayed the same. A variable APY does not promise that it will.

A CD trades access for a set term

A certificate of deposit, or CD, holds money for a set time. Many bank CDs keep one rate for the full term.

A CD can make sense when you know when you will need the cash. Try to match the end date to the bill. Keep emergency money somewhere else.

Read the early-withdrawal rule before you open it. The bank may take back some interest if you leave early. Also check automatic renewal. A CD may roll into a new term if you do nothing.

A brokered CD is different. It is bought through a brokerage. Selling it before it ends can return less than you paid. FDIC insurance does not cover that market loss.

Treasury bills vs. CDs

A Treasury bill, or T-bill, is short-term U.S. government debt. New bills have terms from 4 to 52 weeks. You get the face value when the bill ends.

Both a T-bill and a CD can match a known date. The main differences are simple:

Question | Bank CD | Treasury bill
What backs it? | FDIC or NCUA insurance when eligible and within limits | The U.S. government's full faith and credit
State and local income tax on interest? | Usually yes | No
What if you leave early? | The bank may charge a penalty | The market price may be lower than you paid
Where do you buy it? | A bank, credit union, or broker | TreasuryDirect, a bank, or a broker

TreasuryDirect does not have a simple sell button. To sell a bill early, you must move it to a bank or broker. A newly issued bill usually has a 45-day hold before that move. A four-week bill ends before the 45 days are up.

Money market account and fund are not the same

A money market account is a bank or credit-union deposit. It may include checks or a debit card. It can have FDIC or NCUA insurance when eligible.

A money market fund is a mutual fund. It owns short-term investments. It is not FDIC- or NCUA-insured.

Most retail and government money market funds try to hold each share at $1. That is a goal, not a promise. A fund can lose value. It can also charge a fee during heavy withdrawals.

If cash is already at a brokerage, a money market fund may be handy. Read the fund page first. Check the fund type, seven-day yield, fee, holdings, and sale timing.

I bonds are for money you can leave alone

A Series I savings bond has two rate parts. One stays with the bond. The other changes with inflation every six months.

You cannot normally cash an I bond during the first year. If you cash it before five years, you lose the last three months of interest.

An individual can generally buy up to $10,000 of electronic I bonds per calendar year. Interest is subject to federal income tax. It is not subject to state or local income tax. Many owners can wait to report federal interest until they cash the bond or it ends.

An I bond is not a place for next month's rent. The one-year lock is real.

You may also hear a pitch to "be your own bank" with whole life insurance instead of a savings account. Before you believe a policy can replace real cash, read is infinite banking a scam or real.

Start with the date

Write down the earliest date you may need the money.

Keep surprise-expense money in an insured account with easy access.

For a known date, compare a CD and a T-bill ending near that date.

Compare the return after fees and taxes.

Read the rule for getting out early.

Do not compare the largest number on two ads. A high rate can come with a short promotion, a large balance rule, or a lockup.

Money you will not touch for years has a different job. For that, see what investing $300 a month could do instead of a savings account.

Before you move money

Confirm the bank in FDIC BankFind or the credit union's insurance status.

Add up all deposits held in the same ownership type at that bank.

Check how many days transfers or sales take.

Read every fee, minimum balance, and early-exit rule.

Check whether a CD renews on its own.

Recheck the live rate. Rates can change at any time.

This is a general U.S. guide. It does not pick a bank, fund, security, or rate for you. Tax rules and account terms can change. Read the current official terms before you act.

Sources

FDIC, Deposit Insurance FAQs (accessed 2026-07-27).

FDIC, Understanding Deposit Insurance (accessed 2026-07-27).

NCUA, Share Insurance Coverage (accessed 2026-07-27).

NCUA, Frequently Asked Questions About Share Insurance (accessed 2026-07-27).

CFPB, What Is a Money Market Account? (accessed 2026-07-27).

CFPB, What Is a Certificate of Deposit? (accessed 2026-07-27).

CFPB, Truth in Savings Regulation DD (accessed 2026-07-27).

Investor.gov, Money Market Funds: Investor Bulletin (accessed 2026-07-27).

Investor.gov, Brokered CDs: Investor Bulletin (accessed 2026-07-27).

FDIC, Shopping for a Certificate of Deposit (accessed 2026-07-27).

TreasuryDirect, Treasury Bills (accessed 2026-07-27).

TreasuryDirect, About Treasury Marketable Securities (accessed 2026-07-27).

TreasuryDirect, Selling a Treasury Marketable Security (accessed 2026-07-27).

TreasuryDirect, Series I Savings Bonds (accessed 2026-07-27).

TreasuryDirect, Buying Savings Bonds (accessed 2026-07-27).

TreasuryDirect, Tax Information for EE and I Bonds (accessed 2026-07-27).

IRS, Publication 550: Investment Income and Expenses (accessed 2026-07-27).

TreasuryDirect, Understanding Pricing and Interest Rates (accessed 2026-07-27).

Investor.gov, Bonds: Selling Before Maturity (accessed 2026-07-27).