6-Month vs. 5-Year CDs: What’s the Best Investment Now?

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If you’re thinking about locking in a certificate of deposit (CD), you’re not alone. Interest rates are still high, but they’re expected to drop later this year.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. But which term is the smarter move right now: a 6-month CD or a 5-year CD?Here’s a breakdown of the pros and cons of each, as well as a third option you should consider.How do the rates compare?Top 6-month CDs: ~4.50% APYTop 5-year CDs: ~4.00% APYAt these rates, a $10,000 deposit would earn a total of $223 in a 6-month CD or $2,167 in a 5-year CD.Which would earn more over the course of five years, assuming you reinvested in 6-month CDs every time they matured? Nobody can say for sure. However, the Federal Reserve and economic experts alike are predicting interest rate cuts later this year — and possibly in 2026, too.In that case, there’s a good chance a 5-year CD would earn you more interest overall.Bear in mind that there’s nothing stopping you from investing in both 6-month and 5-year CDs. That could even be a smart way to hedge your bets.But these two terms have pros and cons that you should think about before committing your money.The case for 6-month CDsWho should consider 6-month CDs?6-month CDs are best for savers who:Might need their cash within the next six monthsWant more frequent access to their money so they can act on short-term opportunitiesBelieve interest rates are more likely to rise in the near termThe case for 5-year CDsWho should consider 5-year CDs?5-year CDs are best for people who:Have extra cash they won’t need for a long timeWant safety more than the highest possible returnsExpect interest rates to drop in the near futureHere’s a third option to considerIf you’re hesitant to lock your money up at all, then a high-yield savings account might be the better choice. Your interest rate can change at any time, but right now the best HYSAs pay an APY of around 4.00% or even more. And you can withdraw and deposit cash whenever you want.Our favorite HYSAs pay APYs as high as 4.40%. If you want to start earning a top-tier interest rate without committing to a lengthy CD term, check out our list of the best high-yield savings accounts and open a new account today.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.James McClenathen has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.”}]] [[{“value”:”

If you’re thinking about locking in a certificate of deposit (CD), you’re not alone. Interest rates are still high, but they’re expected to drop later this year.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

But which term is the smarter move right now: a 6-month CD or a 5-year CD?

Here’s a breakdown of the pros and cons of each, as well as a third option you should consider.

How do the rates compare?

• Top 6-month CDs: ~4.50% APY
• Top 5-year CDs: ~4.00% APY

At these rates, a $10,000 deposit would earn a total of $223 in a 6-month CD or $2,167 in a 5-year CD.

Which would earn more over the course of five years, assuming you reinvested in 6-month CDs every time they matured? Nobody can say for sure. However, the Federal Reserve and economic experts alike are predicting interest rate cuts later this year — and possibly in 2026, too.

In that case, there’s a good chance a 5-year CD would earn you more interest overall.

Bear in mind that there’s nothing stopping you from investing in both 6-month and 5-year CDs. That could even be a smart way to hedge your bets.

But these two terms have pros and cons that you should think about before committing your money.

The case for 6-month CDs

Who should consider 6-month CDs?

6-month CDs are best for savers who:

1. Might need their cash within the next six months
2. Want more frequent access to their money so they can act on short-term opportunities
3. Believe interest rates are more likely to rise in the near term

The case for 5-year CDs

Who should consider 5-year CDs?

5-year CDs are best for people who:

• Have extra cash they won’t need for a long time
• Want safety more than the highest possible returns
• Expect interest rates to drop in the near future

Here’s a third option to consider

If you’re hesitant to lock your money up at all, then a high-yield savings account might be the better choice. Your interest rate can change at any time, but right now the best HYSAs pay an APY of around 4.00% or even more. And you can withdraw and deposit cash whenever you want.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.James McClenathen has no position in any of the stocks mentioned. The Motley Fool recommends Barclays Plc. The Motley Fool has a disclosure policy.

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