Cash is an important part of a balanced portfolio, but some cash vehicles offer better returns than others. For example, the highest-paying CD across the U.S. currently has a 5.50% APY. Meanwhile, the top-paying U.S. Treasury security (a 20-year Treasury Bond) currently offers a par yield of 4.84%. And, of course, you can always stash your cash in a high-yield savings account, the best of which pays up to 4.75% right now. So which should you choose?

CD vs. Treasury Bond vs. High-Yield Savings Account

While aiming for the highest return on your cash is smart, other factors should be considered. 

Take liquidity, for example. CDs have fixed interest rates but also fixed terms. These terms can last as little as three months to as long as 10 years, during which you can’t withdraw without a penalty. Remember, the longer the term, the longer your money is tied up. Conversely, high-yield savings accounts generally let you withdraw your funds on demand, but the interest rate is not fixed and can change at any time.

You should also pay attention to return volatility. Unlike bank-issued CDs or high-yield savings accounts, Treasury Bonds can be traded on the secondary market (as can Treasury Bills and Notes). As a result, if you sell a bond before it matures, your total return could differ from its yield to maturity because your return also factors in the bond’s resale price, which fluctuates with market interest rates and demand. You can buy Treasury Bonds at face value directly from the government at TreasuryDirect.gov or trade them at market value on the secondary market through a bank or brokerage.

Finally, the frequency of interest payments also varies. With a high-yield savings account, interest payments are usually credited monthly, though it depends on the bank. Meanwhile, CDs typically pay out interest at maturity, though some long-term CDs may offer periodic interest payments. As for Treasury Bonds, they pay interest every six months.

Why Not All Three?

The best approach may be to diversify your cash across all three of the top-paying cash vehicles unless you strongly prefer liquidity, frequent interest payments, or the potential to resell a bond at a markup. By diversifying, you won’t be too exposed to any single downside. 

For example, if you need to withdraw cash in an emergency, you can do so from your high-yield savings account. Alternatively, if bond values rise, you can seize the opportunity by selling your bonds at a higher price than you bought them, increasing your returns. 

Where Are Interest Rates Headed in 2025?

Of course, cash returns are also affected by the broader economy, including the Federal Reserve’s key interest rate, which could be adjusted at the next Federal Open Market Committee (FOMC) meeting, which ends tomorrow, Jan. 29. However, stubborn inflation and uncertainty over the impact of President Trump’s policy plans have cast doubt on whether the Fed will cut interest rates anytime soon.

According to CME Group, which tracks the likelihood of rate changes based on Fed funds futures trading, there’s a 97% chance that the Fed will maintain its current 4.25%-4.50% target range. Meanwhile, some believe the central bank won’t cut rates this year at all.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts 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. It also cannot specify a maximum deposit amount that's below $5,000.

Banks must be available in at least 40 states to qualify as nationally available. 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.