The best times to open savings accounts, CDs

With today's high interest rates making 4% or even 5% savings APYs attainable, choosing the right place to save can make a big difference in your short- and long-term financial plan. 

If you want to maximize your savings, you may be considering opening a new high-yield savings account or certificate of deposit (CD) — two of the most common account types that offer those high rates. But these accounts have very different uses and features that may suit certain savings goals over others. 

Before you apply, it's useful to know both a savings account might be best for your savings an, when a CD could be the right choice.

See how much you can earn with one of today's top savings rates here.

The best times to open a savings account

These are two of the best times for savers to opt for a high-yield savings account.

When you're saving for emergencies

No matter your long-term goals, an emergency fund is one of the most important things you can have to set yourself up for financial success.

Experts typically recommend saving at least three to six months' worth of expenses to help you cover an unexpected expense or get through a period of financial hardship. Say, for example, you need an emergency auto repair or experience a loss of income. 

Because you may need quick access to your savings in these situations, a high-yield savings account may be ideal. Some banks do limit transfers in and out of your account to six each month, and you may have to wait up to a few business days to receive your funds, depending on the bank you use. But there's no fee for withdrawal, and you'll generally have no issue taking out the money when you need it. 

Start building up your savings balance with one of the best savings rates available now!

When you want to make contributions

If you're a savings beginner, a high-yield savings account can be more flexible for making contributions toward your balance anytime you want. 

There may be a minimum deposit required to open your account, but after that, you can choose how much and how often you want to add to your savings. For example, you may set up automatic transfers into your account each time you get paid or set aside a certain amount in your budget to contribute each month.

Making regular contributions isn't just for beginners, either. It's one of the best ways to take full advantage of today's high interest rates. Adding money to your account regularly can help you increase your savings balance and the interest you earn on it faster than with interest alone. 

Find some of today's top savings rates here now.

The best times to open a CD

These are some of the best times to choose a CD for your savings.

When you have a specific goal

Unlike high-yield savings accounts, which allow contributions over time, you'll only make one deposit over the lifetime of your CD: when you open the account. 

If you already have a balance saved that you want to dedicate for a specific purpose — your future wedding budget, for example, or the money you'll spend on an international trip next year — you're in a prime position to benefit from a CD. 

When you have a savings goal, you can determine a timeline and choose the right CD term for that goal. When the CD matures, you can access the money you originally set aside, plus the interest you earned. 

What's more, CD penalties can be useful in this case. Because you'll take on a fee when you withdraw your money early, a CD may offer added incentive over more accessible savings options to keep your money in the account without spending it on something else.

Learn more about the best CD rates you can get here now.

When interest rates are very high

One of the best times to open a CD is when interest rates are at — or near — their peak. That's good for savers today, as some believe we could be nearing a peak after the Federal Reserve's latest rate pause. 

"CDs are the highest they've been in a long time," says Eric Laub, CFP, founder of Finance 180. "If savers have decided that CDs should be a part of their overall portfolio, then yes, I'd say now is a good time to lock in."

When you open a CD and make your deposit, you lock in a fixed interest rate over a specific term. Even if rates go down, you'll maintain today's high rates until your CD matures. 

Start earning more on your savings by comparing today's top CD rates here.

The bottom line

High-yield savings accounts and CDs can both be important parts of your financial plan. But the differences in how you earn interest, access your account and use your savings can help you determine which is best for your current savings goals and situation. Before opening any new account, make sure you compare different options and evaluate the features and rates offered to most accurately choose the right savings account for you.