I'm Getting Married in 2024. Should I Put My Savings Into a CD?

Getting married is an exciting milestone. It can also be very expensive.

The average cost of a wedding in 2022 was $30,000, according to research from The Ascent, but in some states, it topped the $50,000 mark. Yikes.

If you're getting married in 2024, then at this point, you've hopefully started saving for that big event. And if you have a pile of cash socked away, you may be inclined to move it out of a savings account and into a CD.

CD rates tend to be a bit more competitive than savings account rates in general. And that's certainly the case today.

Given that you might be facing a host of expenses in 2024 as your wedding date gets closer, it's easy to see why you may be inclined to keep your funds in a CD. The higher interest rate you earn could help you more easily cover your costs.

But while that logic makes sense to some degree, keeping your wedding savings in a CD is a move you might regret. Here's why.

When you need funds earlier than expected

Let's say you're getting married next August. If your big day is a good 10 months away, you might assume that you're okay to open a 9-month CD, which might result in a higher interest rate than what your savings account is paying you.

Plus, with a CD, you're guaranteed to earn the interest rate you lock in during the term. With a savings account, your interest rate could rise or fall over time with market conditions.

But remember, the bills you have to cover for your wedding may not all come due exactly around the time of your wedding. Some of your vendors might require deposits at different times well ahead of your wedding date. And if you tie up your cash in a CD, you may not have the money available to pay your vendors when you're supposed to.

For example, let's say you're hiring a band for $3,000 and they want $1,500 three months in advance to hold the date and the remaining $1,500 after they've completed the gig. It would be so unfortunate to not have that $1,500 on hand because you're waiting for a CD to come due.

Also, there are some expenses you have to pay for ahead of your wedding. Wedding dresses, for example, commonly need to be ordered months in advance. And if you're doing paper invitations, you also can't wait till the last minute to order them and send them out. So a better bet is really to keep your money accessible in a savings account if you're planning to pay for a wedding in 2024 -- even if your big day is later on in the year.

You don't want to face a costly penalty

The problem with tying money up in a CD is that cashing out early could result in costly penalties. Now there are no preset rules in that regard. Rather, banks set penalties for early CD cash-outs individually. But at Capital One, for example, you'll lose three months' worth of interest if you cash out a CD early with a term of 12 months or less.

On the other hand, there's no penalty for tapping a savings account, and you can take your money out at any time without a hassle. So if you're looking at a series of big expenses for your wedding, you may want to play it safe and just stick to a regular savings account.

Besides, the amount of interest you end up forgoing may not be all that substantial. Right now, Capital One is paying 4.30% on a 9-month CD. But you'll get that same APY on a Capital One 360 Performance Savings account.

Even if the rate on that savings account drops to 4% right after you fund it, the difference between 4% interest and 4.30% interest over nine months on a $20,000 deposit is $45. It's not worth stressing yourself out over a sum like that when you're potentially talking about covering the cost of a $20,000 affair.