Yahoo Finance Lead Banking Editor and Content Strategist Casey Bond joins Wealth with Brad Smith to share the best certificate of deposit (CD) rates available now and discuss what to consider when choosing a CD that fits your financial goals.
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The Federal Reserve is expected to continue its rate cutting path at some point this year, which could affect rates on savings accounts and CDs, but they haven't started yet, and many people are still getting an over 4% return on their money. Our very own Casey Bond joins us with the top rates available right now. Casey, what have you found?
Right. So, by historical standards, CD rates are still quite high, and we're seeing right now that the best rates are ranging between about 4 to 4 and a half percent, and that's on terms of around 6 months to 18 months.
So, how do you choose the right account and term for yourself?
Right. So, it's very important to make sure you choose a CD that matches your savings timeline. You want to select a term that's long enough to get a good rate, but not so long that you're stuck without your money and may need to pay an early withdrawal penalty if you do need to pull it out before the maturity date. Um, another important factor to look at is the minimum opening deposit. Uh, that's the minimum amount of money you need in order to open an account. So, some CDs may only require $100, while others might need $5,000 or more.
So, what do you do once the CD matures?
You have a few options. Um, one of the best things you can do is take that time to re-evaluate the current interest rate environment. Um, you might find that there are other CDs offering better rates at that time, or you may find that interest rates are still on the decline and you want to roll those funds into a new CD, um, at a higher rate and lock in that rate before rates drop again. Um, another situation you may find is that you need more liquidity and a CD no longer makes sense, so you could move those funds to a high-yield savings account, um, or some other savings or investment product that just makes more sense for you at that time.