With mortgage rates at historic highs, individuals waiting to purchase a home can earn up to 5.75% APY on their down payment funds by utilizing high-yield savings accounts, money market accounts, or certificates of deposit. By comparing rates and choosing FDIC or NCUA-insured institutions, individuals can earn significantly more interest on their down payment money while keeping it accessible.
Financial institutions are offering historically high yields on both certificates of deposit (CDs) and savings accounts, with the top interest rates above 5.00% APY on both. The choice between the two depends on what you prioritize the most and the trade-offs you're willing to accept. If you don't need the money for at least six months, a CD may be the better-paying option. If you potentially need it sooner, a high-yield savings account or money market account should work well. Both have variable interest rates, meaning you could benefit from any future rate hikes. However, CDs offer a fixed rate for a certain amount of time and generally pay higher yields than money market or savings accounts.
