Table of Contents In this article

Why You Can Trust CNET Money

Our mission is to help you make informed financial decisions, and we hold ourselves to strict . This post may contain links to products from our partners, which may earn us a commission. Here’s a more detailed explanation of .
Editorial Guidelines

Writers and editors and produce editorial content with the objective to provide accurate and unbiased information. A separate team is responsible for placing paid links and advertisements, creating a firewall between our affiliate partners and our editorial team. Our editorial team does not receive direct compensation from advertisers.

How we make money

CNET Money is an advertising-supported publisher and comparison service. We’re compensated in exchange for placement of sponsored products and services, or when you click on certain links posted on our site. Therefore, this compensation may impact where and in what order affiliate links appear within advertising units. While we strive to provide a wide range of products and services, CNET Money does not include information about every financial or credit product or service.

Advertiser Disclosure

CNET editors independently choose every product and service we cover. Though we can’t review every available financial company or offer, we strive to make comprehensive, rigorous comparisons in order to highlight the best of them. For many of these products and services, we earn a commission. The compensation we receive may impact how products and links appear on our site.

I’m Saving for the Holidays While Rates Are Still High. Here’s How I’m Doing It

As a personal finance editor and mom, I'm committed to not overspending this year.

Sadeugra / Getty Images

Americans spend an average of over $1,400 during the holidays, according to Deloitte’s 2022 holiday survey. And last year, my husband and I sure did. Despite budgeting and Black Friday deals, we still spent over $1,000 on gifts and festivities that added up quickly. 

Even though we stayed within our budget last year, I want to be more prepared this year. So I started a sinking fund for the holidays. As a parent to two young children, the price of toys can add up in a hurry -- even with a budget. 

With savings rates over 5% right now, I’m using a high-yield savings account to earn a little extra on my holiday savings. And there’s still time for you to start a sinking fund, too. I’ll run you through where savings and CD rates currently stand, then explain how I’m leveraging the high rates to save even more for the holidays. 

Savings and CD rates are changing rapidly across banks and accounts. Experts recommend comparing rates before opening an account to get the best APY possible. Enter your information below to get CNET’s partners’ best rate for your area.

Savings and CD rates are over 5% 

Many online-only banks and credit unions have savings rates over 5%, based on the banks we track at CNET. Although rates are high, they haven’t changed much, which follows experts’ predictions that they’ll remain stagnant ahead of the Federal Reserve’s next interest rate move. But since rates are still high, there’s still time to earn some interest on short-term financial goals.

Rates for certificates of deposit are high, too. If you’re preparing for the holidays, you may choose to open a three-month CD to deposit money now and earn interest. If you open the three-month CD today, you’ll have the money by the beginning of December. If you have longer-term goals, today’s CD rates can still yield a good return. In fact, one-year CDs are on par with most high-yield savings accounts. Here’s a look at the averages for common terms: 

  • 3-month: 3.31%
  • 6-month:  4.71%
  • 1-year: 5.61%
  • 3-year: 4.27%
  • 5-year:  4.05%

While I’m using my Ally high-yield savings account to prepare for the holidays, a three-month CD could also work well -- especially if you want to make sure you don’t dip into the fund before December. Just know you may pay an early withdrawal fee if you need to withdraw your money early.

Here’s how I’m setting up my holiday sinking fund

I started preparing for the holidays in mid-August with a small, attainable goal in mind -- save at least $300 for the holidays. To reach this goal, I’m automatically transferring $25 per week from my checking to my high-yield savings account. So far, I have $50, without accounting for any interest. 

While I plan to spend more than what I’m setting aside, my husband and I feel comfortable with using our discretionary spending in the upcoming months to account for other small gifts, outings and holiday decor. And if any extra money comes in from my side hustle, I’ll add more to the sinking fund to save even more. Here’s how my Ally high-yield savings account is helping me reach my goal without much work. 


Choosing a bank with a high APY can help earn more interest since other banks are offering higher savings rates, but I wanted convenience. Although you can find better HYSA rates than Ally‘s 4.25% APY, my checking account, emergency savings and other sinking funds are there. And I like to have all of my money in one place to manage my money and goals easily. 

But if you’re comfortable managing multiple accounts and separate banks, you may be able to earn more. Just beware of fees, transfer times and withdrawal limits. 

The buckets feature 

Ally’s saving buckets feature helps me track multiple sinking funds in one account easily. These savings buckets are similar to sub-accounts that let me create different savings goals and track my progress without setting up a separate account. 

It’s an attainable goal 

Like most people, I’m juggling other expenses and want to leave room for other leisure activities in the coming months. Setting aside $25 a week means putting $100 per month toward the holidays. It feels realistic and doesn’t offset any of the other financial goals that I have, like planning a family vacation.

You may want to put more toward the holidays or an upcoming goal in your sinking fund. For instance, if you want to save $1,000 for the holidays by mid-November, you’ll need to save about $85 per week. Or you could schedule recurring savings contributions and contribute more when you can.

The bottom line

The holidays are fast approaching. And since savings rates are still high, putting money in an interest-earning account every paycheck or month could work in your favor. Start budgeting your holiday expenses to calculate how much you should save to avoid overspending and comfortably prepare for holiday shopping.

Dashia is a staff writer for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money. Dashia was previously a staff writer at NextAdvisor, where she covered credit cards, taxes, banking B2B payments. She has also written about safety, home automation, technology and fintech.