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4 big reasons to open a CD right now

Savers can grow their money at a rate that easily outpaces inflation with a top CD right now. Getty Images

Those hoping for a permanent cooling in inflation — and a corresponding cut to interest rates — may need to wait longer. That's the  message many are anticipating ahead of this week's inflation report from the Bureau of Labor Statistics. The report, scheduled to be released on May 15, will detail the inflation rate for April.

Another hot inflation report, following elevated reports in January through March, is not what many are hoping for. After all, higher inflation ensures that higher interest rates meant to tame it will remain — and they could even increase if inflation remains sticky. But while that will mean financial pain for borrowers, it will be yet another boost for savers. For those considering a certificate of deposit (CD) account, in particular, now is an especially smart time to act. Below, we'll break down four big reasons to open a CD right now.

See how much more you could be earning with a top CD online today.

4 big reasons to open a CD right now

Here are four major reasons to open a CD now:

Interest rates are high — and possibly going higher

If you take the time to shop around (and consider an online bank), you may be able to find a CD with a rate up to 6% right now. That's a lot of interest to earn simply by transferring a portion of your funds into one of these account types. And with inflation still problematic, the likelihood of yet another interest rate hike is possible now, which would then cause rates on select CDs to increase even further. But because these rates change daily, it makes sense to be proactive.

Get started with a top CD here now.

Your rate will be locked

A major advantage of CDs, especially in today's volatile rate climate, is that the rate you open the account with will be locked in for the full CD term. That's a major advantage right now since today's rates are high, but they won't remain elevated like this forever. However, if you open a rate with a 5% rate now, you'll continue to earn that return for the full CD duration (which can be up to a few years), regardless of what happens to the federal funds rate during that time. 

There are multiple options to choose from

To earn that locked rate you'll need to keep your money in the account until it matures or risk having to pay an early withdrawal penalty. While that may sound intimidating, there are many options to choose from right now. Whether you want to access your money in three months or three years, there will be a CD to open for you right now. Unlike other accounts that only offer a one-size-fits-all option, this is a major pro for those considering a CD this spring

Your money doesn't keep pace with inflation

The average interest rate on a regular savings account is just 0.46% right now, so if you have your funds there you're technically losing money by not keeping pace with inflation. But the top CDs available now not only surpass the inflation rate; some come close to doubling it. Still, as long you're earning more than the current inflation rate, you'll be ahead. And dozens of CDs can offer that right now.

See what CD rate you could lock in here.

The bottom line

While inflation remains more problematic than many had hoped for at this stage in 2024, there are some effective ways to combat it. A CD offers savers one such way. By opening an account now savers can take advantage of today's elevated interest rates and they can do so with a locked rate that won't adjust even if the rate climate does. Plus, savers will have a variety of options to choose from, all of which will be preferable to regular savings accounts which are offering returns many times less than today's inflation rate. Just be sure to only deposit what you can comfortably afford to part with for your full CD term; otherwise, you may have to pay a hefty penalty to regain access to your funds. 

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