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Why you should open a CD and high-yield savings account this week

The potential for returns to increase on CDs and high-yield savings accounts is strong this week. Getty Images/iStockphoto

While inflation and elevated interest rates raised to tame it have hurt borrowers over the last two years, they've been a major boost for savers. Those who opened certificates of deposit (CD) and high-yield savings accounts have earned exponentially more on their money than they would have if they opened the same accounts in 2020 or 2021, for example. By being strategic about opening these accounts, savers could potentially earn hundreds or even thousands of dollars right now.

But the strategic moves around CDs and high-yield savings accounts don't just revolve around how much to deposit or what rate to secure (although these are important, too). It's also critical to open these accounts at the right time to maximize potential returns and to truly take advantage of today's rate environment. To that end, there's a compelling case for opening both accounts this week. Below, we'll break down why.

See how much more you could be earning with a CD online now.

Why you should open a CD and high-yield savings account this week

Here are three reasons why you should consider opening both savings accounts this week.

Interest rates may rise

The latest inflation report is scheduled to be released on Wednesday. If it comes in hotter than expected, as it has multiple times already this year, that could result in an immediate uptick in returns being offered on CDs and high-yield savings accounts. Since the Federal Reserve fights inflation with higher interest rates, if the report released for April shows inflation still problematic, lenders may get ahead of the Fed by offering higher rates on both accounts. So pay attention to what the report shows and be prepared to capitalize by opening both account types that day.

Explore your top high-yield savings accounts here today.

You'll need additional ways to protect your money

If this week's inflation report is another disappointing one, it will undoubtedly affect your money and investments. With this context, then, you'll need additional ways to protect your money. Both CDs and high-yield savings accounts can do just that. Both accounts are safe and insured up to $250,000 per account, per lender. 

And, as noted, they come with higher rates (think 4% to 5%) for each, easily outpacing today's stubborn inflation rate. Compared to the minimal 0.46% savers are averaging with regular accounts, then, it becomes clear that CDs and high-yield savings accounts are the preferable way to protect your money right now. 

Debt may become costlier

Inflation and elevated interest rates have made borrowing costs surge in recent years. With rates on credit cards over 20% right now and personal loans around 12%, there are few cost-effective borrowing options available now. So if you have either type, you'll need to have high interest-earning savings accounts to help pay them off. 

High-yield savings accounts and CDs can help do just that. But it will take time to earn these returns, so it's beneficial to open them as soon as possible (and CDs, in particular, will penalize savers for withdrawing their money early). But if you need a way to pay off rising debt, both savings accounts offer a path to help do so.

Get started with a high-yield savings account now.

The bottom line

With inflation sticky and the newest report just days away from being released, savers looking for an edge may want to consider opening both high-yield savings and certificates of deposit (CD) accounts right now. That's because interest rates could rise on these accounts in response, so savers will want to be positioned best to earn those returns when they do. But they'll also want (and need) additional ways to protect their money, which both accounts can offer. And they may need to earn more to pay off growing rates on their debt. 

As with all financial products and services, however, be sure to weigh the pros and cons of both savings accounts before getting started to ensure that they can offer the unique help you may need this week.

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