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Should you open a CD now?

A CD offers significantly higher interest rates than a traditional savings account does. Getty Images/iStockphoto

With inflation still hurting the wallets of millions of Americans, particularly when they visit the supermarket, it may make sense to start exploring other options to save money and earn more interest. For some homeowners, this can be a refinance or a home equity line of credit (HELOC). For many others, it can be a simple transfer from a regular savings account to a high-yield one or a certificate of deposit (CD).

CDs offer unique advantages for those interested. This particular account, provided by both credit unions and banks, will pay account holders interest on the amount they deposit for a set time period only. This interest is typically higher than the 0.33% many would get with a regular savings account, although you'll need to keep the money stored in the CD for the full agreed-upon term. 

So, should you open a CD now or are you better off looking elsewhere? Find out if a CD is worth it by checking available interest rates here now or simply use the table below to explore your local options.

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Should you open a CD now?

There are multiple advantages to opening a CD, even with the current state of inflation and market unpredictability. Here are three reasons why you should open a CD now.

Higher interest rates

Compared to regular savings accounts you can earn significantly more interest by parking your money in a CD. As mentioned, a savings account's APR hovers around 0.33%. A CD, meanwhile, could be 4% to 5% or higher during the same time period. 

What does that look like in hard numbers? If you put $5,000 into a savings account you'd earn $16.50 after 12 months. But if you put that same amount into a CD you'd earn $225 (with a 4.5% interest rate). You can start earning more money by opening a CD here. You can also use the table below to review your options.

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Financial protection 

It's always good to have money in a regular savings account to use for a rainy day. But it also doesn't hurt to put some into a CD so that you know it will be there in the future. It can be tempting to tap into a savings account when needed (and often, when not critical). 

A CD won't allow you such easy access, forcing you to save and earn interest on the money you may have otherwise withdrawn to spend elsewhere. Think of a CD as a forced way to protect your money. If you're concerned you're spending too much of your hard-earned savings due to higher costs - and think you can afford to spend less - then open a CD now and start protecting your money.

Minimal fees and maintenance

If you like the idea of earning more interest on your money but don't want to deal with pricey fees and maintenance concerns then a CD is worth opening. Traditional savings and checking accounts are normally accompanied by pesky fees that could eat into the money you saved (and the interest you earn on that savings). But with a certificate of deposit account, you can set it and forget, offering you security and peace of mind knowing that your money won't get reduced each month by fees and other penalties. 

The bottom line

CDs are a secure way to protect your money and earn more in interest. Rates are now significantly higher than those being offered on regular savings accounts. CDs can also safeguard your money by locking it away for a set period of time thus eliminating the temptation to overspend. And it can grow without the burden of fees and maintenance penalties that may have been applied to a traditional savings account.

If a CD sounds beneficial to you then start exploring your options online now. You can also use the table below to find a CD that earns high interest. 

Mobile app users click here

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