What to do with down payment money in high-yield savings account - Business Insider

down payment for a home

, you may be wondering if you should let the market's volatility change your plans. Should you switch to a different savings account with a higher rate, or put your money into a CD? Potentially invest some or all of it? Or even plunge fearlessly ahead with your planned purchase, once it's safe to go outside?

I'll talk through each of these options below, but across the board, it's worth noting that your determinations should come from yourgoals and timelines, not from the market. Because while you can't control its ups and downs, you can control your own reaction, and a calm and steady mind will be a crucial tool in the weeks and months ahead.With the Fed cutting rates, it's likely that your go-to high-yield savings account is no longer quite so compelling.

Just bear in mind that the interest rates on high-yield savings accounts are fluid even in the best of times, and areso in the wake of the COVID-19 outbreak, when so much is uncertain. So even if you find an HYSA with a rate that strikes your fancy, there's no way to guarantee that rate long term.For those kinds of guaranteed rates, you might want to look into a certificate of deposit, or CD.

The cons are that your financial institution is able to offer these benefits because your funds will be entirely off-limits to you until the set maturity date. Whether that's months or years down the line — and even if circumstances in your life change radically — withdrawing from a CD early will result in a steep penalty that essentially nullifies all the gains of a higher interest rate.you can spare the cash, a CD might be worth considering.

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