Preserve Your Earning Power: Take Advantage of Competitive CD Rates
The Federal Reserve’s recent decision to lower the federal funds rate has sent deposit account rates on a downward trend. However, savvy savers can still lock in a competitive return on a certificate of deposit (CD) and safeguard their earning power.
CD Rates Remain Attractive
Despite the decline, CD rates remain high by historical standards, particularly for shorter terms. You can find rates of 4.00% APY or higher for terms of about one year and under. Even longer-term CDs offer attractive rates, with the best available rates hovering near 3%-4% APY for terms of three years or more.
Top CD Rates Available Today
Marcus by Goldman Sachs currently offers the highest CD rate of 4.25% APY on its 1-year CD, with a minimum opening deposit of $500 required. Other top CD rates can be found from our verified partners.
Understanding CD Rates and the Federal Funds Rate
CD rates are closely tied to the federal funds rate. When the Fed increases its target rate, deposit account rates usually follow suit, and vice versa. With the Fed’s recent rate cuts, CD rates have begun falling, making now a prime opportunity to lock in today’s higher rates.
Is a CD Right for You?
Before investing in a CD, consider the following key factors:
- Interest Rates: CDs are more attractive when interest rates are high or trending downward, as they lock in the current rate for the entire term.
- Financial Goals: CDs are a safe investment choice for preserving capital and earning a steady return, but may not be suitable for long-term goals like retirement.
- Liquidity Needs: CDs require locking in your money for a set period, so consider your liquidity needs before investing.
Where to Find the Best CD Rates
Don’t settle for mediocre rates from your current bank. Explore online banks, credit unions, and community banks that offer competitive rates and better terms. Online banks, in particular, can offer higher rates due to lower operating costs.
Act Now to Preserve Your Earning Power
With CD rates trending downward, now is the time to take advantage of competitive rates and lock in your earning power. Compare CD account options, consider your financial goals and liquidity needs, and invest in a CD that meets your needs.
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