Why I won’t withdraw my money from my high-interest savings account no matter how much interest rates fall

Savers haven’t had much to celebrate lately. Interest rates on high-yield savings accounts and certificates of deposit (CDs) fell sharply following the Federal Reserve’s half-percentage point interest rate cut on September 18. And experts predict two more rate cuts in the next two months.

Some people turn to CDs to lock in the 4.00% APR while it’s still available. But I’m sticking with my high-yield savings account, even though I know I’ll earn less and less interest over time.

Interest isn’t the only value a bank account can provide

The most important deciding factor for most people, myself included, when choosing between a high-yield savings account and a CD is not the interest rate. It’s accessibility.

Savings accounts allow you to withdraw money as needed, but some limit you to six fee-free withdrawals per month. There is usually no limit to how many deposits you can make.

With CDs, on the other hand, you usually have to forego access to your credit for the entire CD term. If you withdraw your money early, you must withdraw it all at once. You’ll lose any interest you would have earned over the remainder of the term and will likely pay a penalty equal to several months’ worth of interest payments.

For me, the accessibility that a savings account provides is too valuable to give up, even with higher interest rates. I keep my money in a Discover® online savings account so I can access it at any time. Although I know interest rates will decrease from the 4.10% APR I earn now, I will continue to earn an interest rate well above the national average. If you want to score a competitive rate with no access restrictions, take a closer look at the Discover Online Savings account. Anyone who opens an account with promo code TMF924 by March 13, 2025 can earn up to $200 as a sign-up bonus, depending on the deposit amount.

Now is the time to switch to a high-yield savings account

Just because I leave my money where it is doesn’t mean it’s the right decision for you. If you’re still banking at a brick-and-mortar institution that pays you 0.01% APR, you can definitely do better. No matter how much interest rates fall in the coming months, switching to a high-yield savings account will put you ahead of the game.

High-yield accounts at online banks not only offer higher APYs than traditional savings accounts, but they are also known for not incurring common bank fees. This could help you save money compared to a brick-and-mortar savings account, which charges you fees each month for holding the account.

You don’t have to cut ties with brick-and-mortar banks forever if you’re uncomfortable with it. You may prefer to keep a traditional checking account so you can access cash when you need it. You should be able to link this to your high-yield savings account so you can easily transfer money between them.

I mentioned the Discover® Online Savings account above, but if you don’t think it’s right for you, there are many other options. Check out our favorite high-yield savings accounts that could help you build your wealth.