Why you should open a CD before 2024
It wasn't that long ago that interest rates were low and borrowing costs were moderate.
During the height of the pandemic in 2020, homebuyers could secure a home for rates below 3%. Savers, on the other hand, got very little back on any deposits made. But as the rate environment has changed, homebuyers have been left on the sidelines, as savers now enjoy significant interest on their funds.
But if the interest rate environment has shown anything in the past few years, it's that timing is everything. If savers wait too long, they could lose the chance to earn significant returns. But if they get started too early, the returns they secure will be minimal. The timing has to be just right. And in the waning months of 2023, the time is right to open a CD now.
Check the top CD rates you could qualify for now and start earning more interest on your savings!
Why you should open a CD before 2024
Here are three reasons why savers should open a CD before the new year.
Rates are high
CD rates are currently high, with one account even offering upward of 7% now. While that may be a rarity in today's market, it's not difficult to find a CD with a rate of 5.50% or higher, particularly if you open an account with an online lender. That's a substantial amount of money that can be made simply by transferring funds from a regular account into a CD.
How much money can be potentially made? Here's how much you can make with a $5,000 deposit into a one-year CD, based on today's CD rates:
- At 6.00%: $300 (for a total of $5,300 after one year)
- At 5.75%: $287.50 (for a total of $5,287.50 after one year)
- At 5.50%: $275.00 (for a total of $5,275 after one year)
See how much you could be making with a top-earning CD here now.
Rates could drop
Today's elevated rate environment won't stay elevated forever, or even for the next year or so. In fact, many experts feel that CD rates may have already peaked, while others are forecasting a drop to come in 2024. If either is true, then it makes sense to open a CD now. Since rates on CDs are locked for the full CD term, savers will continue to earn interest at the elevated rate they opened the account with, even if rates fall in 2024.
You're already losing money
Have you checked the interest you're earning on your regular savings account? The average savings account interest rate currently is just 0.45%. But you can easily find a CD with a rate 12 times higher. So by keeping your money untouched in your regular account, you're essentially leaving money on the table.
Don't continue making that mistake, particularly if rates drop in 2024. Instead, get started with a top-earning CD account now.
The bottom line
The CD interest rates of 2020 are in the rearview mirror, but there's no clear forecast for where they're heading into 2024, either. With the possibility that rates on these accounts may have already plateaued, it makes sense to take advantage of the high interest-earning capability these accounts offer now. Rates could drop next year, plus you're likely already losing money by keeping your funds in a regular savings account. By opening a CD now, you'll start earning more interest now and well into the future, even if (or when) rates inevitably fall back to a lower range.
