Before creating a step stool or ladder, savers should also consider whether they have the time to manage certificates at different banks with different maturities, Ms. Costa said. Unless you are moving a large sum of cash, she said, the effort may not be worth the extra yield.
For many people, Ms. Costa said, choosing a high-yield savings account may be the best approach — even if it means getting a somewhat lower return on your savings. The online bank Marcus, the consumer arm of Goldman Sachs, is offering 4.5 percent on a savings account, for example, and Ally Bank, another online-only bank, is paying 4.35 percent. You’ll need to link the savings account to your regular bank to transfer money in and out.
Here are some questions and answers about C.D.s and savings:
Why not leave my money in a high-yield savings account?
For emergency funds that you may need on short notice — say, for an unexpected car repair — savings accounts are a good fit. But banks can, and do, change the rates they pay on such accounts at any time, so that option could become less attractive if rates fall. That shouldn’t be a big concern, however, if your money is meant for emergency expenses, Ms. Benz said. For a rainy-day fund, she said, “the goal is return of principal rather than return on principal.”
What about money-market funds?
Many brokerage firms have been paying around 5 percent on money-market mutual funds, low-risk investment accounts. But money-market funds are not federally insured. And the rate on these accounts can change at any time.
Should I move more of my investments to cash, while savings rates are still attractive?
Paul Brahim, a financial adviser at the Wealth Enhancement Group in Pittsburgh, said he heard that question from clients eyeing attractive yields on low-risk cash vehicles. He said he generally advised clients to keep money in cash based on their spending needs for the next six months to three years, including a reasonable reserve for emergencies.
But if you move too much money out of long-term investments, Mr. Brahim said, market timing becomes more of a risk, and you could miss out on significant investment gains. “Cash is a great idea for everyone,” he said. “But it’s important to have a rational allocation.”