![]() ![]() If you need to withdraw the funds before the CD term ends, you’ll usually pay a penalty. One drawback of a CD is limited flexibility. Unlike investments in stocks and bonds, which will vary in their rate of return, this savings option provides a fixed interest rate for a set period of time and usually pays a higher annual percentage yield than checking or savings accounts. What is a CD?ĬD stands for “certificate of deposit,” a deposit account that offers a fixed interest rate for a specific period of time, called a term.ĬDs are good for investors who want a fixed rate of interest with little to no risk of losing their money. Here’s where CD rates stand right now and the banks offering the best rates. “The interest rate you can get is still high, around 4% to 5% APY, and considering the recession expectations and as long as the inflation won’t go up again, we may not see these rates six months from now.” “It may be the right time to lock your rate for long-term CDs such as for one to three years, depending on your needs,” Baruch Silvermann, a banking expert and CEO of The Smart Investor, previously told CNET. ![]() Rates may remain the same for many months, but you’ll want to compare CD rates now, so you can make the best choice for your savings before rates drop. With few banks still raising rates, we’re reaching the turning point for CDs. Whether the Fed raises rates one last time or holds, experts expect we’ll see a minimal change in savings rates - making now the right time to lock in a high long-term CD rate. If the Fed does raise rates, experts predict it will be the last rate hike for the year. But with inflation cooling, the Fed might choose to stall its rate hikes. The Fed has raised the federal funds rate at every FOMC meeting since March 2022. Although there’s a chance the Fed will raise rates one last time, experts don’t expect CD rates to change much either way. The May Federal Open Market Committee Meeting is in session today and will conclude midday tomorrow. ![]()
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