Should you wait until May to open a CD?

If you've been considering opening a certificate of deposit (CD), you might be wondering if now is the best time to act — or if waiting until May could lead to better opportunities. After all, today's CDs can offer attractive returns with minimal risk, given that the interest rate environment remains favorable for these deposit accounts. But with so much uncertainty in the current economic environment, timing your CD purchase can feel like a bit of a gamble.

But as the Federal Reserve continues to weigh its next moves and the interest rate environment remains in flux, choosing when to open a CD isn't just about chasing the highest possible rate. It also involves considering your unique financial situation, cash flow and goals for your money. So, whether you're looking to reinvest a maturing CD or plan to make a new deposit, the decision to act now or hold off a few more weeks should be weighed carefully.

So how do you know whether the right move is to act now or wait? Here's how to determine whether this is the right time to open a CD — or if holding off until May might make more sense in your specific situation.

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Should you wait until May to open a CD? 

Here's when it may and may not make sense to wait until May to open a CD account:

No, if you're waiting to see where rates go

If you're holding out for potentially higher CD rates in May, you might want to reconsider your strategy. Financial experts generally advise against trying to time the market for the perfect CD rate, as interest rate movements are notoriously difficult to predict with accuracy. And, that's especially true right now. 

After all, the Federal Reserve has kept interest rates paused so far this year and the economic environment is uncertain, which makes it tough to accurately forecast rate changes. So, delaying your decision based on speculation could mean missing out on currently competitive rates that are available today.

Plus, the opportunity cost of waiting for a hypothetical better rate can be substantial. Every month you delay opening a CD is a month of lost interest at current rates — and you'd be delaying those interest returns with no certainty that rates will actually rise in the future. 

Lock in a competitive rate on a CD today.

No, if you have a CD maturing soon

If you have a CD account that's maturing soon, waiting until May to open a new one could be a costly mistake. When your CD matures, most banks automatically roll the funds into a new CD at current rates if you don't provide alternative instructions, often giving you only a brief grace period of seven to 10 days to make changes. This automatic renewal typically happens at whatever rate is available on the renewal date, which might be significantly lower than what you could secure by actively shopping around for the best rates across different financial institutions.

The CD rate shopping advantage diminishes significantly when you have maturing funds. Having your money sitting in a lower-yield account while waiting for potentially better rates in May means you're missing out on guaranteed earnings today. Even a few weeks in a standard savings account rather than a new CD could represent hundreds of dollars in lost interest on larger balances.

So, rather than gambling on future rate increases, a more prudent approach is to consider laddering your CD investments — splitting your maturing funds into multiple CDs with different terms — which provides both ongoing liquidity and protection against rate fluctuations while ensuring your money remains continuously invested at competitive rates.

Yes, if you can make a bigger deposit 

If waiting until May means you'll have substantially more money to deposit in a CD account, delaying your decision could be financially prudent. The power of a larger principal amount often outweighs small fluctuations in interest rates, especially for longer-term CDs. 

For example, if you expect to receive a significant tax refund, bonus or other windfall in the coming weeks that would increase your deposit amount by 10% or more, the additional interest earned on the larger principal could exceed what you'd gain by locking in today's rates on a smaller deposit.

Let's say waiting until next month means you can deposit $10,000 instead of $5,000 in a CD account. In that case, you could double your return on a 2-year CD at today's rates: 

• Depositing $5,000 into a 2-year CD at 4.15%: $423.61 earned at maturity for a total of $5,423.61
• Depositing $10,000 into a 2-year CD at 4.15%: $847.22 earned at maturity for a total of $10,847.22

So, by waiting a short period to accumulate more funds, you're maximizing the base on which your interest will compound over the entire CD term. 

The bottom line

Ultimately, deciding whether to open a CD now or wait until May comes down to your unique financial strategy. If you're chasing slightly higher rates that may or may not materialize, the cost of waiting could outweigh the benefits. But if a larger deposit is just around the corner, it might be worth the short delay to maximize your return.

Rather than trying to time the market perfectly, focus on what you can control: your savings goals, deposit amount and how you want to manage your liquidity. But whether you choose to open a CD today or in a few weeks, taking a thoughtful approach ensures your money is working for you — and not sitting idle.