APY = Annual Percentage Yield. APYs are subject to change at any time without notice. Your risk tolerance determines whether CDs or bonds are a better fit. CDs currently boast a great interest rate and no risk. Bonds can provide you with a steady income and are considered a low-risk investment.
What is the difference between a bond and a CD?
Bonds also expose investors to both interest rate risk (how a bond’s value responds to a rise or fall in interest rates) and credit risk (the issuer’s creditworthiness). In contrast, CDs have little risk to the principal. Rates. CDs may offer slightly higher annual percentage yields (APYs) than a typical savings account.
Are CDs better than I bonds?
With I bond rates at 4.30%, the better return over the next year appears to be CDs. Further, if you need to cash in your CD, you will lose interest but will likely get your original investment back. This option doesn't exist with I bonds.
