This summer, the only beaches I’m visiting are local ones. They’re not Instagram-worthy or all that exciting. But with the cost of everything out of control and the economy likely headed for a downturn, I can’t justify splurging on travel to far-off destinations.

Instead, I’m prepping for next year’s vacation. I’m taking the travel fund I’ve already saved up and putting it into a nine-month certificate of deposit with a 4.25% annual percentage yield to help me realize my vacation dreams next year. Here’s why.

Read more: Best CD Rates for June 2025: Lock in an APY up to 4.50% While You Still Can

A CD can help me maximize my savings

I could always put my travel fund in a high-yield savings account, which earns a competitive interest rate and keeps my money safe. That’s where I keep my emergency fund for easy access. But rates on high-yield savings accounts are variable and could go down if the Federal Reserve ends up cutting interest rates in 2025. 

CDs, on the other hand, provide guaranteed earnings with a fixed APY over the entire term length. My vacation fund would be locked in, and my returns won’t drop if the economy gets even shakier (which seems to be its default setting lately). 

Top CDs currently pay up to 4.50% APY, which is on par with top high-yield savings accounts.

CDs have a built-in temptation check

By opening a CD, I’m agreeing to keep my money in the account for the full term. Typical terms range from a few months to several years, so it was easy to find one that coincides with next year’s summer travel plans. If I take funds out of the CD before it matures, I’ll face an early withdrawal penalty, which eats into my earnings.

That temptation check is perfect for recreational spending goals. I struggle with a tendency to treat “current me” at the expense of “future me,” dipping into savings I’ve earmarked for other things to pay for something I wish I could afford now.

A CD’s early withdrawal penalty can help thwart this impulse and ensure my vacation funds are still there when it’s time to plan next summer’s trip.

I can use the money for other things if I need to

When my CD expires, I don’t have to use the funds for a vacation. I can always withdraw them and put them toward a more pressing expense or roll them over into a new CD and let them continue growing.

A savings account may be a better choice for you

A CD is a good fit for my travel savings because I already have money set aside for a vacation — I’m just being frugal and choosing not to use it this year. 

Most CDs require a lump-sum deposit when you open them, and you usually can’t add money to the account after that. (Some banks offer add-on CDs, which do allow additional deposits, but the APYs aren’t as high.)

If you want to build your fund over time, a high-yield savings account is a better fit. With a HYSA, you can deposit money any time and continue growing your vacation fund whenever you’re able to stash away some extra cash.