$10,000 1-year CD vs. $10,000 high-yield savings account: Which will earn more interest?

We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms.

If you have $10,000 currently sitting in a traditional savings account and are waiting on a big return on your five-figure deposit, you may find yourself waiting for a very long time. With an average interest rate of just 0.38% right now, according to the FDIC, interest earnings on an account of this size will be barely noticeable. And that's unfortunate in any economic climate but especially now with inflation still elevated and higher interest rates resulting in elevated borrowing costs. In this specific climate, it's especially important that the accounts savers are using are as effective and profitable as possible.

Fortunately, there are multiple viable alternatives of which a certificate of deposit (CD) and high-yield savings account are two. Interest rates on both sit around 4% right now and, with a CD, that rate will be fixed and the same until the account matures. A high-yield savings account, meanwhile, comes with a variable rate that can be unpredictable in a different economy but is widely expected to remain high and steady now. That said, the economy can change and the outlook can improve, so locking your money away for an extended period with a CD may not make financial sense. Securing it just over the next year, however, can be both profitable and a smart way to protect your principal through today's market uncertainty.

To better determine if a 1-year CD makes sense for your $10,000, however, it helps to compare the interest-earning potential against what a high-yield savings account is currently offering. Below, we'll crunch the numbers that savers should know with both options before getting started.

See how much interest you could be earning with a top savings account here.

Because the CD comes with a fixed interest rate and the high-yield savings account has a variable one, it can be difficult to match the interest-earning potential of each with precision. But with rates on high-yield savings accounts unlikely to dramatically rise or fall over the next 12 months, savers can still gain a reliable approximation of what they stand to earn with this size deposit.

Here's how much interest both account types can earn, calculated against the top rates available with each over the next year and the assumption that the high-yield savings account rate will remain constant:

While the CD will be slightly profitable in this scenario, the numbers here don't tell the full story. If high-yield savings account rates rise