Is a CD or a money market account better now? Here’s what 3 experts think.

The Federal Reserve held its benchmark rate at a range of 3.5% to 3.75% at its July meeting, the fifth straight pause on rate changes. However, three Fed officials broke ranks and voted to raise it at the latest meeting, and that split has led some analysts and experts to believe there will be more rate hike pressure at its next meeting. Case in point? As of early August, the CME Group’s FedWatch Tool shows a nearly 70% probability of a rate hike at the next Fed meeting.

“We entered 2026 with the market expecting multiple rate cuts,” says Derik Farrar, senior vice president and head of everyday banking and borrowing at U.S. Bank. “We’ve had no cuts, and now the next move is likely up.”

If the Fed does raise interest rates, yields on deposit accounts may follow suit. That could benefit savers who open certain accounts now. Traditional savings accounts return a paltry yield, but many certificates of deposit (CDs) and money market accounts are currently offering rates of about 4% on average, slightly above the current 3.5% inflation rate. So. if you’ve got savings you want to start earning interest on, it may help to understand how these two accounts compare right now. 

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Is a CD or a money market account better now? Here’s what 3 experts think.

We asked banking and financial experts to weigh in on whether a CD or money market account could make more sense for savers in today’s rate climate. Here’s what they had to say:

Why a CD could be the better option right now

A guaranteed rate is the main reason a CD could be a solid choice right now, experts say, regardless of what the Fed does next. Opening this type of account could make a lot of sense considering CD rates are still high — and the rate you lock in will remain the same until the CD matures.

“Right now I’d point most savers toward a CD, not a money market account,” says Jeff Judge, a managing partner and certified financial planner at Chesapeake Financial Planners.

While interest rates could rise, no one knows for certain where rates will go next, and recent events show how quickly expectations can change. When Kevin Warsh took over as Fed chair this spring, many expected him to support rate cuts amid pressure from the current administration. Instead, Warsh has held rates steady at the last two Fed meetings and has taken a tougher stance on inflation.

Will Warsh return to supporting lower interest rates, or will the committee continue to hold rates or even raise them? When it comes to CDs, you don’t need to predict the correct answer. You can simply lock in a solid, guaranteed CD rate while it’s available.

“Rates like this don’t sit around forever, and locking today protects against the scenario where they move against you before you act,” Judge says. “The most common mistake I’m seeing is savers leaving six figures in a checking account earning close to nothing while they ‘wait to see what the Fed does.'”

A CD may work especially well for money you plan to spend on a set date because you can choose a CD term that ends when you may need access to the cash. Since the CD rate stays the same, you can calculate how much interest the account will earn before you open it.

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Why a money market account could be the better option right now

On the other hand, a money market account may be more beneficial for some savers in today’s unpredictable rate climate because it gives you easier access to your money while still providing a solid yield. Its variable rate may also give you an opportunity to earn more over time if rates rise. That can be useful if you are not sure when you will need to access the funds in your savings or if you think rates could rise later this year.

“I’d lean toward a money market account for most savers right now,” says Christopher Stroup, a certified financial planner and founder of Silicon Beach Financial. “With policy uncertainty still high, preserving flexibility has real value. Many clients are keeping cash accessible while earning competitive yields rather than locking into a CD before there’s more clarity on where rates ultimately settle.”

Unlike a CD, a money market account is variable, meaning your rate isn’t locked in when you open it. The rate can change on the account over time, so your yield could rise if the Fed raises rates later this year. 

In turn, waiting to lock in a CD rate and holding your money in this type of account instead may make financial sense, especially since your money can still earn a solid return in the meantime. Farrar recommends keeping your money in a high-yield savings or money market account unless you have a purchase coming up on a set date. 

“With a rate cut off the table, and robust demands for loans, attractive rate and term CD combinations continue to come to market,” Farrar says. “If you wait a few months and no desirable long-term CD options emerge, today’s CD offers will likely still be available given the market consensus that the next move is up.”

You could keep your money in a money market account for now, for example, and then move it into a CD later when you have a better idea of when and how you plan to use it.

Why a high-yield savings account may also be worth considering

A high-yield savings account is another option that might benefit savers in today’s environment. This type of account functions similarly to a traditional savings account, giving you quick access to your money, but unlike traditional savings accounts, these higher-yield options currently offer variable rates of about 4%. Unlike CDs, though, high-yield savings accounts don’t have a maturity date, so you can generally withdraw your money without an early withdrawal penalty.

Another option is to divide your savings among CDs, money market accounts and high-yield savings accounts based on when you expect to need the money. 

“Different savings goals deserve different accounts,” says Stroup. “A high-yield savings account works well for an emergency fund because it’s simple and immediately accessible. A money market account can hold cash you’ll likely use in the coming months, while CDs are better suited for money earmarked for a known future purchase or obligation with a fixed timeline.”

These three options make more financial sense than a traditional savings account, which currently offer average rates of under 0.40% — which is well below inflation, causing your savings to lose purchasing power. 

The bottom line

Whether a CD or money market account is the better option right now depends largely on your financial goals. If you want a guaranteed return, a CD might be a good option amid interest rate uncertainty, as it locks in today’s elevated rates until maturity. On the other hand, a money market account might make more sense if you prioritize having access to your cash. Its variable rate can climb if the Fed raises rates this fall, and you won’t incur a penalty if you need the money earlier than expected.