Savings vs. CD accounts: Which should I choose?

Published on May 22, 2020 | 3 min read | Webster Bank
Last updated: March 10, 2025

Unsure if you should put your money into a Savings account or if a CD is a better option? A savings account offers you more flexibility and access to your funds, but a CD will probably provide you with a greater return. The answer mostly likely depends on the purpose of the funds and the timeline for when you need the funds.

Savings account

• What is a savings account? A savings is an interest-bearing account that allows you to make deposits or withdrawals as you please. The interest rate on this type of account is usually variable.
• Is a savings account right for me? A savings account is ideal for someone who may need their funds within the near future or someone who is incrementally saving for something. It is also a great option to store a rainy day fund or an account to cover unexpected expense.
• What are my savings options? Whether you just want a stand-alone savings, relationship savings or require special titling… Webster Bank will match you with the right product.

CD account

• What is a CD account? A CD or Certificate of Deposit, is an account type that establishes a contract between a bank and the customer. The bank guarantees a fixed rate for a specific period of time. The customer agrees to deposit their funds for a specific period of time. Ending this contract early may result in a penalty.
• Is a CD right for me? A CD is a great option for someone that has excess funds that they don’t need immediate access to. This may be a desirable option for someone looking for a higher return than a savings account.
• What are my CD options? We have multiple options to fit your needs.
  • A 6 Month Liquid CD gives you fixed rate and the ability to withdraw your balance when you need it.
  • A 3 year Bump Up CD allows you to increase your rate, once during the 3-year term, if interest rates increase.
  • An IRA CD is another safe and secure investment option for your retirement plan. Pick a term between three months and five years and earn the highest rates when you have a linked Webster relationship checking account.
  • A Traditional CD allows you to pick a term that works with your schedule. Terms between three months and five years. Earn the highest rate when you have a linked Webster relationship checking account.

In reality, it may be an ideal strategy to do both. Most people want to be able to incrementally build their savings over time or need a rainy day fund. They may also have excess funds that they can set aside for a period of time that will earn a little more interest.

Need help picking an account?

• Visit our savings or CD pages
• Visit one of our Banking Centers
• Call us at 203.271.8738