Comparing CD Rates and S&P 500 Returns: Which is the Better Investment?

The best-paying CDs currently offer rates over 5%, but they are unlikely to beat the S&P 500, which has returned 15.7% YTD. The top-paying CDs have rates several times higher than the nationwide average for CDs of a similar term, but they fall short of the S&P 500's total returns. While CDs are a safer investment with guaranteed returns, the stock market is notoriously unpredictable. The Fed's projections of future monetary policy suggest that CD rates could go higher, but most CDs charge a penalty fee for withdrawing funds before the end of the term.