Want to maximize your CD account? Experts say to do this

After several months of interest rate increases, many American savers are taking an interest in certificates of deposit (CDs).

Today, some short-term CDs offer as much as 5% APY or more, in exchange for keeping your money in the account through the entire term. Long-term CDs are competitive too, though their rates are closer to 4%-4.50% APY. 

If you're considering putting your savings in a CD today, you should be sure you're making the most of today's high rates while also preparing for future economic and rate changes. To get started, here are some tips from experts that can help your CD strategy.

Explore your CD options now and start earning more money.

How to maximize your CD account

Here are some tips we've gathered from experts about the best ways to maximize your CD account today:

Determine your timeline

A CD can be most beneficial when you have a goal for your money. 

"In my opinion, FDIC-insured CDs are good investments for cash you may want to use in the next one to five years," says Alex Rezzo, CFP, founder of Andante Financial. For example, maybe you have $2,000 to put toward a European vacation next summer, or you've saved $5,000 to give to your nephew when he goes off to college in three years. 

Even though each of those CD terms has a different interest rate, they can all lock in a competitive APY that will help you reach your goal. Once you've determined the timeline you're working within, you can proceed to find the right CD.

Start your CD search with some of the best rates available today here now.

Take advantage of today's rates

Along the same lines, there's no reason to wait to open your account once you've determined what you want to save for.

You might be waiting for the perfect time to lock in a CD rate — when rising interest rates hit their peak before starting to fall again — but you may be better off taking action now instead of risking missing the perfect moment.

"Rising rates are to the saver's advantage right now," says Max Pashman, CFP, founder of Pashman Financial. "We don't know how long rates will stay this high for, but don't think it will last forever." Keep an eye on it, he says, but you can make the most of your short-term reserves now using a CD or even a high-yield savings account.

Use a CD ladder

If you are concerned about whether interest rates could rise or fall in the future, one way to maximize your savings is by setting yourself up to benefit from either scenario. 

"Consider laddering your CD maturities to prepare for wherever the rates head in the future," Rezzo says.

You could use a CD ladder to set up accounts that mature at different points, so you can lock in a portion of your balance to long-term rates today, while having the option to roll over shorter-term CDs at potentially higher rates when they mature.

"If someone doesn't know whether to buy a one year CD or a five year CD, they can always stagger the CD terms, putting a little in one year, three year and five year CDs," says Katie Brewer, CFP, founder of Your Richest Life financial planning firm.

Read the fine print

Knowing all of the account details of your CD can help you maximize your earnings while avoiding mistakes. 

You may already know the risks of withdrawing early from your CD account, like the penalty fee which can wipe out some (or all) of your interest earned. But there are other account details to be aware of before committing to your CD's term.

For one, exactly how you earn your interest. Will it compound monthly, annually or along some other time frame? Depending on the bank you choose, you may see different amounts listed for "interest rate" and "APY" due to the difference in compounding. As long as you plan to keep the interest earned within your account, rather than withdrawing it early, the APY stated will be the rate you actually earn.

Other details include how long the withdrawal or rollover window is when your CD matures (typically 10 days), the time you'll have to make your initial deposit, the types of CDs offered by your bank and more.

Start exploring CDs that could work for your savings goals here.

The bottom line

CDs are a great way to maximize your savings today, but you can take them even further by strategizing how exactly to best reach your savings goals. Some things to consider include your timeline and how that affects your CD term, whether a CD ladder could help you score the best rates long-term and all the account details that can be found within your account's fine print. And perhaps most importantly, remember that the sooner you get started, the more you can earn. Don't wait for the perfect moment to lock in a rate if there's an account that already fits your goals today.

Learn more about all the best CD accounts available right now here.