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Why you should open a CD this November

Now is a great time to open a high interest-earning CD account. natalia gdovskaia/Getty Images

When it comes to personal financial decisions, the timing has to be right. If you open an account or buy an insurance policy too early, for example, you may get little back on your investment. But if you wait too long, you may also miss the window of opportunity to reap big returns. This is particularly true in today's economy, as inflation continues to eat away at the purchasing power of the dollar and higher interest rates result in higher borrowing costs. Against this backdrop, savers need to be smart about where they put their money.

Fortunately, there are multiple bank accounts worth opening now. High-yield checking, high-yield savings and certificates of deposit (CD) accounts all come with elevated interest rates now, making them a great way to earn more on your funds. But the benefit of opening these account types is very much dependent on when they're opened. And for those looking for a CD, November 2023 could be a great time to get started.

See how much you could be making with a top-earning CD here now.

Why you should open a CD this November

Here are three compelling reasons why you should open a CD this November.

Interest rates are high

Interest rates on CDs are the highest they've been in years, with many online banks offering rates of 5.5% or higher right now. Some savers may even qualify for a 7% rate. Compared to the 1% APY or less that could've been secured in 2020 or 2021, now is a great time to open a CD, regardless of the term you choose. 

When stacked against the minimal 0.46% rate that accompanies most regular savings accounts, you're essentially losing money by not transferring some funds into a CD account today. By depositing $5,000 into a one-year CD now, you could make hundreds of dollars in interest on your money.

Get started with a CD account here today.

But interest rates are paused now

While CD interest rates are high now, they're also on pause after the Federal Reserve declined to issue another rate hike to their benchmark interest rate range this week. While this could be a precursor to a final rate hike to come in December, it's also a possible sign that the continuous rate increases we've seen in the last 18 months could be coming to an end soon. 

Accordingly, CD rates may have peaked. At a minimum, the long-term forecast for CD rates varies. With this understanding, it makes sense to open a CD with a high rate now while rates are still elevated. If you wait, you could lose the opportunity to earn big returns on your money.

Returns are guaranteed

Those elevated returns, by the way, are guaranteed. Unlike high-yield savings accounts, which come with variable APYs, the interest rate you open your CD with will remain the same throughout the full CD term, even if rates drop during that time frame. This is one of the major reasons why it's worth opening a CD now. 

If interest rates on these accounts do drop in 2024, for example, you'll still be earning money at that higher rate anyway. Just note that, right now, rates are generally higher on short-term CDs (less than a year) than they are on long-term accounts.

The bottom line

While most of 2023 has been beneficial for CD account-holders, the window of opportunity to earn big returns on these accounts may soon be closing. Interest rates were paused in September and again this week. With the potential for one more additional rate hike this year before a possible drop in 2024, now is a great time to lock in a high CD rate. Get started with an account here today!

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