Which account type typically offers the highest interest rate for long-term savings where access isn't needed for years?

A Certificate of Deposit (CD) is designed specifically for long-term savings where the funds are meant to remain untouched for a specified period, such as several months to several years. CDs typically offer higher interest rates compared to other standard savings accounts because they require the depositor to lock in their money for the term of the CD. When you agree to leave your money in the account for a fixed period, the bank rewards you with a higher interest rate as compensation for the reduced liquidity and access to those funds.

In contrast, savings accounts and money market accounts provide more flexibility in accessing your funds, but this accessibility generally leads to lower interest rates since the bank has to ensure there is liquidity available for withdrawals. Checking accounts, on the other hand, are primarily intended for everyday transactions and typically offer very low or no interest rates to facilitate frequent access and liquidity. Thus, for someone looking to maximize their returns on long-term savings without needing access to their funds for years, a Certificate of Deposit is clearly the best choice.