COMPARISON · MONEY · SAVINGS
$10,000 parked for a year: a 4.40% high-yield savings account — Pibank’s no-strings print, the best verified on October 23, 2026 — earns $440.00; a 4.60% 1-year CD — Popular Direct, re-checked the same day — earns $460.00. Both pay ordinary income tax, federal and state, with no exemptions — so in a 22% federal + 5% state household the CD keeps $335.80 to the HYSA’s $321.20: CDs win by $14.60. A real edge, and a fragile one: the HYSA’s rate can be cut at any time, and the CD can’t be touched early without a penalty. Run the four scenarios below.
Enter the HYSA rate, the 1-year CD rate, your deposit, and your federal and state brackets. The calculator pays one year of interest on each, taxes both at your combined federal + state rate (CD and savings interest are ordinary income — neither is state-exempt), and names the winner. Then switch the scenario: a rate cut on the HYSA, a broken CD, or a no-income-tax state.
Lock vs liquidity, taxed the same. The CD’s 4.60% is locked for 12 months; the HYSA’s 4.40% can be cut tomorrow. But the CD’s lock has teeth: cash out early and you typically forfeit 3 months of interest. Both pay ordinary income tax at federal + state rates — no T-bill-style state exemption — so tax narrows the gap but can’t flip it. At the defaults, the CD’s $20.00 pre-tax lead becomes $14.60 after tax. The real question isn’t the $14.60; it’s which of the two risks — a rate cut or a penalty — applies to you.
Setup: $10,000, a 4.40% HYSA (Pibank, verified Oct 23, 2026) and a 4.60% 1-year CD (Popular Direct, verified Oct 23, 2026), a 22% federal + 5% state household.
Line 1 — the gross. HYSA: $10,000 × 4.40% = $440.00 of interest. CD: $10,000 × 4.60% = $460.00. The CD leads by $20.00 before tax — APY already includes compounding, so this is the full year’s haul.
Line 2 — the tax. Combined rate: 27%. HYSA: $440.00 × 0.73 = $321.20 kept. CD: $460.00 × 0.73 = $335.80 kept. The $20.00 lead shrinks to $14.60 — the same 27% bite lands on both sides.
Line 3 — the verdict. $335.80 − $321.20 = CDs win by $14.60 on $10,000. And the break-even: any CD rate above 4.40% beats the HYSA at these tax rates — because the tax treatment is identical, the break-even is simply the HYSA rate itself.
Branch — the 37% bracket (5% state, everything else at default): combined tax 42%. HYSA: $440.00 × 0.58 = $255.20. CD: $460.00 × 0.58 = $266.80. CDs win by $11.60. The higher bracket shrinks the edge from $14.60 to $11.60 — tax compresses the gap, but with identical treatment it can’t flip the winner.
Branch — the rate-cut scenario (HYSA drops 0.50 pp after 6 months): the HYSA pays 4.40% for six months ($217.63) and 3.90% for the next six ($197.34) — $414.97 total, $302.93 after tax. The locked CD is untouched at $335.80. CDs win by $32.87 — the cut more than doubles the CD’s edge. This is the lock’s entire value: the break-even CD rate falls to 4.15%, and any CD above that beats a falling HYSA.
Branch — the broken CD (cashed at 6 months, 3-month-interest penalty): the CD earned $227.41 in six months, then the bank claws back $113.07 (three months’ interest) — net $114.35, $83.47 after tax. The HYSA, untouched, kept $321.20. The HYSA wins by $237.73. This is the lock’s entire cost: break the CD and you don’t just lose the edge — you lose to the account you were beating.
Branch — the no-income-tax state: state forced to 0%, combined tax 22%. HYSA: $440.00 × 0.78 = $343.20. CD: $460.00 × 0.78 = $358.80. CDs win by $15.60. No flip here — moving to Florida or Texas helps both sides equally, and the CD’s lead just widens a touch because the tax bite is smaller.
Branch — the error case: set the federal bracket to 100% or more and the calculator refuses — under 100% only, and federal + state combined must stay under 100% too. It also refuses rates over 25% (a typo check) and a cash amount of $0 or less.
| Output | Formula | What it means |
|---|---|---|
| HYSA after-tax | A × rH × (1 − fed − state) | $321.20 at the defaults — what the savings account actually puts in your pocket. |
| CD after-tax | A × rC × (1 − fed − state) | $335.80 at the defaults — the locked rate’s full-year payoff. |
| Winner’s edge | | CD after-tax − HYSA after-tax | | $14.60 for CDs at the defaults — the number to decide on. |
| Break-even CD rate | HYSA’s effective pre-tax APY | 4.40% at the defaults (4.15% in the rate-cut scenario) — any CD above this line beats your HYSA. |
| Broken-CD net | 6 mo interest − 3 mo penalty | $114.35 pre-tax in the early-withdrawal branch — the price of the lock. |
APY is used as the exact one-year yield, which is correct by definition — APY is the annualized return with compounding. The rate-cut branch models the HYSA at the entered rate for 6 months and 0.50 pp less for 6 months, compounding monthly-equivalent — a real cut could land any month, not exactly at the midpoint. The early-withdrawal branch assumes a 3-month-interest penalty, the most common 1-year-CD schedule; some banks charge 90 days, some 180, and a few forfeit more. Taxes are modeled at marginal rates on the full year’s interest — it ignores deductions, phaseouts, and the fact that CD interest is reported in the year credited. Rates are snapshots from October 23, 2026 — re-check before opening anything. This is educational math, not tax or investment advice.
Bright Side Kit. "HYSA vs CDs: After-Tax Verdict 2026 | Bright Side Kit." https://brightoolbox.com/hysa-vs-cds/ Accessed October 24, 2026.Data sourcesThat’s exactly what the lock is for. Run the rate-cut scenario: a HYSA that drops 0.50 pp halfway through the year keeps $302.93 after tax on $10,000, while the locked 4.60% CD keeps $335.80 — the CD’s edge more than doubles to $32.87. If you believe savings rates are headed down and you won’t need the money, locking usually wins. If rates are headed up, the lock works against you.
For a 1-year CD, the most common penalty is 3 months’ interest (some banks use 90 days, others up to 180). In the calculator’s early-withdrawal branch — breaking a 4.60% CD at 6 months — the bank claws back $113.07, leaving $114.35 of interest before tax. Always read the penalty schedule before you open the CD, because the penalty can eat every dollar of interest you earned.
Yes. Both are ordinary interest income, taxed at your federal bracket and your state rate. Neither gets the T-bill’s state-tax exemption (31 U.S.C. §3124 covers federal obligations, not bank deposits). The practical upshot: tax can shrink the CD’s edge — from $20.00 pre-tax to $14.60 after tax at the defaults — but it can never flip the winner, because the bite is identical on both sides.
Yes, any day. HYSA rates are variable by design — the bank sets the APY and can change it whenever it wants, usually following the Federal Reserve’s benchmark. The 4.40% default on this page is a snapshot verified October 23, 2026, not a promise. The rate-cut scenario exists precisely so you can price that risk before you choose.
Not the winner. In a no-income-tax state the calculator forces the state rate to 0%: the HYSA keeps $343.20 and the CD keeps $358.80 — CDs still win, by $15.60. Both products are taxed identically, so removing the state layer helps both equally and the pre-tax gap decides, just slightly wider.
If you expect savings rates to fall and you won’t need the money, yes — that’s the rate-cut scenario: the HYSA keeps $302.93 after tax while the locked CD keeps $335.80, an edge of $32.87. But direction matters: the Fed raised its benchmark in September 2026 and signaled more hikes, so a “cut is coming” bet needs its own homework. If you expect hikes instead, the lock works against you. Run both scenarios before you decide.
Split the money by job. Keep 3–6 months of expenses liquid in the HYSA — emergency money is never CD money, because breaking the CD in the example costs you $237.73 against the HYSA. Lock the surplus — the house deposit, the next car, the known-future bill — in the CD and collect the $14.60 edge per $10,000 where it’s safe. You get the lock’s yield on the patient money and the HYSA’s freedom on the money that might not be patient.
The calculator’s break-even CD rate: 4.40% at the defaults — because both sides are taxed identically, any CD paying more than your HYSA rate wins. If your HYSA gets cut 0.50 pp halfway through the year, the break-even falls to 4.15%: any CD above that beats a falling savings rate.