Jumbo CD vs High-Yield Savings: Which is the Best Place to Store $100k?

If you're looking to stash some cash away in a less risky venture, I'll break down two of the best accounts to consider. When you purchase through links on our site, we may earn an affiliate commission. Here’s how it works. Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.You are now subscribedYour newsletter sign-up was successfulWant to add more newsletters?Delivered dailyKiplinger TodayProfit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more delivered daily. Smart money moves start here.Sent five days a weekKiplinger A Step AheadGet practical help to make better financial decisions in your everyday life, from spending to savings on top deals.Delivered dailyKiplinger Closing BellGet today's biggest financial and investing headlines delivered to your inbox every day the U.S. stock market is open.Sent twice a weekKiplinger Adviser IntelFinancial pros across the country share best practices and fresh tactics to preserve and grow your wealth.Delivered weeklyKiplinger Tax TipsTrim your federal and state tax bills with practical tax-planning and tax-cutting strategies.Sent twice a weekKiplinger Retirement TipsYour twice-a-week guide to planning and enjoying a financially secure and richly rewarding retirementSent bimonthly.Kiplinger Adviser AngleInsights for advisers, wealth managers and other financial professionals.Sent twice a weekKiplinger Investing WeeklyYour twice-a-week roundup of promising stocks, funds, companies and industries you should consider, ones you should avoid, and why.Sent weekly for six weeksKiplinger Invest for RetirementYour step-by-step six-part series on how to invest for retirement, from devising a successful strategy to exactly which investments to choose.Question: I'm retiring in a few years and want to reallocate around $100,000 to a less risky investment. Which savings account would work best for me?Answer: There are several solutions where you can earn thousands of dollars risk-free in a year. Two of the most popular choices are jumbo CDs and high-yield savings accounts.Which one would work best for you? I'll break down when to use each and which one earns you the most cash.Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special IssuesProfit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.Profit and prosper with the best of expert advice - straight to your e-mail. The first factor you should consider is whether you'll need access to any of the $100,000 within the next year. If you do, or want the flexibility to reinvest in something else in a few months, then I recommend a high-yield savings account.What I like about them is that you can earn healthy rates of up to 4.20% APY with online banks with no fees. This allows you to maximize your cash in a quick window. You'll also receive FDIC insurance with many banks, protecting your investment up to the first $250,000 deposited per account holder.Use this Bankrate tool to shop for the right savings fit:Why now: The Iran War increased gas prices by 20%, so it's safe to say the cost of everyday goods will rise. David Payne of the Kiplinger Letter notes that even if gas prices revert to where they were, he thinks inflation will rise to 3.0% by the end of the year on account of rising healthcare costs and tariffs' impacts.If the Fed cuts rates later this year and inflation continues to rise, it'll squeeze your earnings. With a HYSA, you won't have to worry about any early termination fees. You can make adjustments as needed, keeping you ahead of the game so you don't feel the pinch. Another option to consider is a jumbo CD. A jumbo CD has many of the same rules as a regular CD in that you can't withdraw your deposit before the maturity date, unless you want to pay an early termination fee amounting to a few months of earned interest.Moreover, as its name implies, jumbo CDs are reserved for larger deposits — think $50,000 to $100,000 minimums. The good news for investors is that these CDs have quicker maturity (terms range from six months to one year), making them a good short-term strategy if you're looking to reallocate some retirement funds to less risky ventures.Use this Bankrate tool to compare and find the best CD options for you:Why now: The Federal Reserve will have a new chair in May.

President Donald Trump nominated Kevin Warsh to the post. Provided the Senate approves his nomination, he'll take over for Jerome Powell. If they don't, Powell will fill in on an interim basis.This matters because Warsh has stated previously that interest rates should be lower. However, the Fed has a delicate balancing act as inflation continues to rise and the job market continues to be weak, so there might not be a rate cut this year. Even with the uncertainty, now is a great time to lock in one of the highest APYs without having to worry about Fed policy.Here's how much you can earn with each savings option:AccountTypeDepositAPY1-year earningsEarly withdrawal penaltiesHYSANewtek Bank$100,0004.20%$4,289.20Nojumbo CDECFU Financial$100,0004.35%$4,350A few months of interest earnedUsing this example, a jumbo CD will earn you the most money. It's also the ideal option if you don't have cash flow issues since it features a fixed interest rate, allowing you to maintain higher earnings even if the Fed cuts rates later this year.However, as you can see, the earnings difference isn't substantial. Either way, you're going to earn at least $4,000 effortlessly in a year with access to your cash. Therefore, your cash liquidity and short-term goals will direct the course to help you choose the best option for your needs.Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.Sean is a veteran personal finance writer, with over 10 years of experience. He's written finance guides on insurance, savings, travel and more for CNET, Bankrate and GOBankingRates.