Have a CD account maturing right before interest rates are cut? Do this now.
Interest rate cuts, on hold for all of 2025, could soon become a reality again. After the Federal Reserve issued three reductions in the final months of 2024, the central bank elected to pause rates for the first eight months of the year, citing concerns over inflation and economic instability. But that could change in September, with the CME Group's Fedwatch tool currently listing a rate cut for the central bank's September 17 meeting at a 92% likelihood, approximately. And while that trajectory could change, it's increasingly looking likely that borrowers saddled with high rates may soon get some small but significant relief.
But what about savers? Particularly those who locked in a high rate on a certificate of deposit (CD) account in recent years? A rate cut won't be nearly as helpful for this group, even if it's expected to be by just 25 basis points to start. Banks don't even need to wait for that cut to become official to start reducing the rates they offer to savers. And, if you have a CD account set to mature in this climate, you may be unsure of your next steps. But there are still constructive moves to make, before rate cuts are made official again. Below, we'll detail three moves worth making now.
Start by seeing how high today's current CD interest rates are here now.
CD account moves to make if your account is set to mature before interest rates are cut
While every saver's needs and approach may be different, many of those with a CD account set to mature now, right before rate cuts are issued again, could benefit from making the three moves below.
Check out the competition
Sure, CD interest rates are not as high as they were six months ago or at this point in 2024 but they're still relatively strong, with some of the better ones around 4.50% now. But don't just take the word of your current bank. Instead, shop around and check out the competition to see what's available elsewhere. You may be able to take advantage of online banks, for example, by taking out your maturing CD funds and transferring them there, instead. That said, a proactive approach is key here as you'll have a limited grace period before your account is automatically rolled over, which is something you'll want to avoid happening in what's expected to be a cooler rate climate.
Shop for high-rate CD accounts online here.
Re-evaluate your budget
Can you even afford to lock your money away in a new CD account now? And, if you can, can you do so with the same amount of money? With rate cuts all but assured now, it may be advantageous to open a new account with a larger amount to maximize your interest earnings. Or you can keep the same amount but deposited into a new, long-term CD to earn even more over an extended period. If your budget has changed since you first opened your account, it's important to complete this re-evaluation now. Ideally, you can exploit today's still elevated rate climate while not overextending yourself.
Let the bank know of your plans
As mentioned, you'll have about a week to 10 days worth of a grace period to move your funds or risk having them automatically rollover into a new account. Once you've checked out the competition and closely examined your budget, then, you should let the bank know of your plans. It's possible that they'll want to keep your business and be willing to find a lucrative new home for your funds. Or they may not be. But communicating here is key, especially with the window of opportunity to lock in new, high-rate alternatives seemingly closing by the day.
The bottom line
September rate cuts don't need to be the end of the interest-earning journey for CD account holders, even if their account is close to its maturity date. By taking the above, strategic steps now, before that deadline arrives, these savers can better ensure continued, long-term interest earning success, regardless of what ultimately happens in the interest rate climate.
