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Here Are the Regrets I Have About My CD Account (And What I Do Now Instead)

CDs aren't necessarily bad. They're just not a one-size-fits-all answer.

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Heather Bien
Melinda Sineriz, ABFP®
By Heather Bien , Edited by Melinda Sineriz, ABFP®
Updated Sept. 18, 2026
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Quick Read

  • A CD's rate is locked for the term, but auto-renewal can relock your money at whatever rate the bank is offering next.
  • Pulling money out before the term ends usually means a penalty of several months' interest.
  • A high-yield savings account trades the locked rate for access, which is where I keep the cash I need access to without compromising on my interest rate.
  • At the national average savings rate of 0.38% (as of 06/15/26), $20,000 earns $76 a year. The same balance could earn up to nine times more with a SoFi account. See SoFi®'s current rate.

When I was new to the working world, I had my savings account and my retirement accounts through work. Investing beyond a 401(k) seemed intimidating, but I knew I was supposed to do something. So I looked at the products offered through a traditional bank at the time. It's where I'd been banking since high school, and it seemed like the path of least resistance.

Opening a CD made the most sense to me, particularly as someone who wasn't interested in spending a lot of time researching options. It was safe. There was a guaranteed rate of return. I didn't need access to this money anytime in the near future. I was happy to let it sit.

And so I did.

It sat for years. It would renew again, and again, and again. While the CD started in the 2% range, it dropped within a few short years, particularly as CD rates reached historic lows. But I wasn't paying attention, and today I have real regrets about how long I let that CD sit.

I know better now, and here's what I would do differently.

$20,000 earning nothing could mean $73 a month, gone. Move it to SoFi and earn up to 4.40% APY on Savings (3.30% APY1 with +1.10% APY Boost) for up to 6 months2.

The regrets

I kept forgetting about auto-renewal

If you don't watch for the notices your bank sends, in the mail or in your inbox, you could easily miss the renewal window. It's one of those life admin tasks that can easily fall by the wayside and, all of a sudden, your grace period has closed, and you haven't explored other places to park your money. You haven't made a move, and your money is now tied up for another 6 months, 1 year, or longer.

The rates kept falling

While a CD's interest rate is locked for the lifetime of the CD, that doesn't continue into the next renewal period. If market rates fall, so will your fixed interest rate. For me, that became an issue as CD rates hit historic lows in the mid-2010s. Rates hovered just above 0%, and at that point, I was locked in and waiting for my opportunity to get out again.

I ended up wanting to use the money

Because I wasn't paying close attention to the auto-renewal periods, I still had money in a CD years after my life had changed. I was older, married, and looking to buy our first house when it hit me: "Oh … most of my savings is sitting in a CD … and I don't want to get penalized for drawing it out."

It was fine. The money was for renovation projects that weren't urgent. But the minute I could take it back, I did.

We did the research for you. Having your checking and savings accounts with the same financial institution can make money management a lot simpler. SoFi® was our 2026 award winner for Best Checking and Savings Combo because it delivers on interest and additional features. For example, you could earn up to 4.40% APY on your savings balance with direct deposit. (3.30% APY1 with +1.10% APY Boost) for up to 6 months on new accounts.2 SoFi also offers more special features than any other account combo we looked at: No account fees: No overdraft fees.3 No minimum balance fees. No monthly fees.4 Get paid up to two days early: Feel the magic of payday up to two days earlier — automatically — when you set up direct deposit.5 Access additional FDIC insurance up to $3M: Typically, single-member deposit accounts are federally insured up to $250,000. With SoFi, FDIC insurance up to $3 million on deposits is available through a seamless network of participating banks.6

Open an account with SoFi here.

What I do now instead

My cash on hand now sits in a high-yield savings account. It holds enough to cover any projects or cash needs as they come up, and I can move it the day I need it.

The rate isn't locked, so it can drop. That's the tradeoff I took, and after watching my locked rate fall anyway, it was an easy one to make.

Money I don't need access to goes into accounts with a higher potential for return, including stocks and an IRA.

I still have a CD, but it plays a much smaller role than it used to, and I monitor it now. It holds some money, not the bulk of my savings. I consider whether it still makes sense at the end of each term, and I don't let it renew just to renew.

If you have One year at 0.38% APY (national average) One year at 3.80% APY (example) You are leaving behind
$10,000 $38 $380 $342
$25,000 $95 $950 $855
$40,000 $152 $1,520 $1,368
$50,000 $190 $1,900 $1,710
$100,000 $380 $3,800 $3,420

Bottom line

CDs aren't a bad choice. They're simply not the right choice for every dollar you save. When you're looking for a stable, longer-term option with a reliable return, a CD could be the way to go. When you want stronger returns, or access to your money on short notice, a CD probably isn't your best option. Think about how you want your money to work for you, whether you may need to use that money in the near term, and make the best decision for your dollars right now.

FAQs

What happens if I withdraw from a CD early?

You can withdraw the funds from a CD early (it's your money, after all!), but most banks charge a penalty. The penalty is usually a set number of months of interest, often around three months on a short-term CD and six to 12 months or more on a longer one.

If you pull the money out early in the term, before you've earned that much interest, the penalty could eat into your original deposit. The exact terms vary from one financial institution to another and are spelled out in your CD agreement. And there are also no-penalty CDs available, although those tend to pay less in interest.

Is a CD better than a high-yield savings account?

CDs and high-yield savings accounts are different. That means one isn't necessarily better than the other, but both offer pros and cons depending on what you're looking for. Typically, a high-yield savings account has a higher interest rate, but that interest rate can change depending on how rates look in the market at large. Meanwhile, a CD's rate is locked in. You know what you're getting. On the flip side, you can't easily withdraw money from a CD, while your cash in a high-yield savings account is generally liquid.

What happens when a CD matures?

When a CD matures, you have two options: pull the money out or leave it in. Typically, you have a short period of time, usually 7 to 10 days depending on the bank, after the CD matures to decide what to do. If you don't do anything, the CD will usually renew.

Would You Spend Ten Minutes for $1,465?

That's roughly the year's difference on $40,000 between the national average and the up-to-4.00% rates available now. And ten minutes isn't a figure of speech. You just provide some information, like your name, address, Social Security number, and the account your deposit money's coming from. But rates are variable and follow the market, which is why the only number worth acting on is today's. Compare the current top accounts here.

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