Last year, a fewCNET Money expertswere able to snagcertificates of depositwith interest rates above 6%.
Since the Federal Reserve’srate cutin September, CD savings rates have beenslowly dropping.
The answer depends on your savings goals.
Five-year CDs, for example, typically have the highest interest rates.
Banks tend to pay more interest when savers agree to let them hold their money for several years.
Wheninflationis high – like it has been for the past few years – interest rates tend to go up.
That doesn’t mean you shouldn’t lock in a long-term CD.
Read more:My CD Is About to Mature.
What Should I Do in Today’s Falling-Rate Environment?
She recently compared CD rates herself.
She still plans to utilize CDs to earn a return on her money.
She decided to move the funds to amoney market accountsince the interest rate was higher than a CD.
The account gives her more flexibility to withdraw money since she’s consideringbuying a home.
Short- or long-term CD: Which should you choose?
Compared to last year, CD rates are lower across all terms.
It’s best to be strategic and keep your options open.
Tip:Before you lock money into any CD, ensure you have savings set aside in anemergency fund.
Joy also recommends using any additional money to pay down balances on credit accounts before considering a CD."
I am personally coaching too many people who are hoarding cash AND holding onto debt," she said.
Ahigh-yield savings accountdoesn’t.
