What is the most compelling reason for choosing a savings account over a one-year certificate of deposit for accessible funds needed in 18 months?

The most compelling reason for choosing a savings account over a one-year certificate of deposit (CD) when funds may be needed in 18 months is the assurance of access to the account for unforeseen expenses. A savings account offers greater liquidity, allowing the account holder to withdraw funds at any time without the penalties typically associated with early withdrawals from a CD. This flexibility is especially important for those who might need immediate access to their funds for unexpected costs, making the savings account a practical choice for short-term financial needs.

In contrast, a one-year CD locks in funds for the duration of the term, and accessing those funds before it matures often incurs penalties, which could diminish the principal amount. Being able to withdraw funds easily in a savings account is crucial for maintaining cash flow and managing emergencies effectively. This priority on accessibility is what makes a savings account more suitable for someone needing funds within the next 18 months.

While factors such as higher rates of return, tax considerations, and safety due to government insurance can influence an account holder's decision in different contexts, they do not directly address the immediate need for fund accessibility in this scenario.