$10,000 CD vs. $10,000 High-Yield Savings Account: Which Earns More Toward Your Down Payment Right Now?

Saving for a down payment can delay homeownership for many first-time homebuyers.

According to a recent report from the National Association of Realtors®, the Profile of Home Buyers and Sellers, 11% of all buyers cited that saving for a down payment was the most difficult step in the homebuying process.

Investing your savings can help speed up the process to be sure, and interest rates have been the talk of Washington, DC, lately. Federal Reserve officials announced Jan. 28 there would be no change to the federal funds rate, prompting President Donald Trump to announce his pick for a new Fed chair in hopes of lowering interest rates. 

Lowering rates can encourage more borrowing and spending, but it also will mean less of a return on the most accessible saving accounts, like certificates of deposit (CDs) and high-yield savings accounts. 

As you work to calculate how much you’d need saved for a mortgage, here’s what you need to know about these common accounts as of now. 

Growing your down payment savings 

The time required for the average U.S. household to save for a typical down payment has significantly decreased. According to the most recent data collected by Realtor.com®, it took seven years in 2025 for homeowners to save for a down payment. 

This marks a dramatic improvement from the recent high of 12 years in 2022, which was driven by the simultaneous surge in home prices and down payments, and a sharp decline in savings rates.

But while we’re seeing an improvement, experts agree that there is still an uphill climb for many aspiring homeowners to get their down payment savings in good shape. 

In 2025, the U.S. personal savings rate averaged 5.1%. This figure is significantly lower than the average of 6.5% observed before the pandemic and is a sharp decline from the roughly 30% highs reached during the pandemic. This lower rate is a factor that constrains how quickly households can save enough cash to cover upfront housing expenses.

"Ultimately, setting a clear savings goal and consistently putting money aside is a meaningful first step toward homeownership, even in today’s challenging housing and economic environment," says Realtor.com® Senior Economic Research Analyst Hannah Jones. 

Saving in a CD vs. high-yield savings account 

When saving for a down payment, two main choices offer significantly better returns than standard savings accounts: a HYSA and a CD. These options function quite differently, so your best choice hinges on your homebuying timeline and the amount of flexibility you require.

In the current 2026 market, top HYSAs are hovering around 4.20% to 5.00%, while 1-year CDs are seeing top rates around 4.10% to 4.16%.

Though offering similar returns, where you put your savings can produce vastly different outcomes, depending on your timeline. 

When it comes to HYSAs, your money remains accessible, though transfers to external banks may take one to three business days. However, rates do fluctuate with Federal Reserve decisions, which means what you earn today might change next month. That’s why watching what happens with the Fed chair is so important. 

On the other hand, CD rates tend to skew lower than those of HYSAs, but they are locked in for the time you select, whether that be three-month, nine-month, 12-month, or even longer terms. While locking in affords stability and reliability, rules around accessing the money are strict and come with a penalty for tapping into it before the lock-in time is up. 

High-yield savings account or CD: comparing $10,000 investments for down payment growth

Let’s say you’ve managed to save $10,000 for a down payment on a house, and you’re hoping to move to Cleveland, OH. The median downpayment in 2025 was $19,167, so your savings will need some help growing. 

At present, the “Big Three” when it comes to banks in America—JP Morgan Chase, Bank of America, and Wells Fargo—do not offer high-yield savings accounts. To keep our figures all in house then, we’ll look at Capitol One, which offers both CDs and HYSAs. At current, their 360 Performance Savings account offers a 3.30% APY, while their 12-month 360 CD offers a 3.90% APY fixed. If you put your money into the 12-month CD, you’d have an ending balance of $10,390. With the high-yield savings account, you’d end up with $10,330.

While a $60 difference might not seem like much, remember that with the CD, you are essentially buying insurance against falling interest rates. That $60 is guaranteed with the CD, while the HYSA rate could fall in the coming weeks depending on what happens with the Fed. 

That said, if you’re actively looking for a home and might need to tap into the money sooner than a year, you risk a penalty with taking your money out of the CD early.

For 12-month (or less) CD accounts, the penalty for withdrawing early is three months of interest. For CD accounts longer than 12 months, the penalty for withdrawing early is six months of interest. If you close the CD early, you pay a $96.16 penalty, a fair bit more than you would earn keeping your money locked up and untouchable.