CBS News
Why you should ladder your CD accounts now
Getty Images
Certificates of deposit (CDs) are a popular place to put your savings for a few different reasons. For starters, they are efficient, low-risk and generally have a higher interest rate than other savings products. And, CDs are especially popular right now, as a high-interest rate environment means you can earn fairly significant interest.
But if you’re looking for a way to maximize your returns when using CDs, one slightly advanced strategy is to build a CD ladder. And, no hammers or nails are required to build one. It just takes a bit of planning and knowledge.
Start shopping for CDs online today.
Why you should ladder your CD accounts now
Laddering your CD accounts only requires you to open CD accounts at a bank and have money to fund the accounts.
CD laddering basics
When you buy a CD, you’re promising to keep your money in the bank for a set period of time in exchange for a set interest rate. The time period is generally between three months and five years. The rate is determined by the bank, and CD rates will vary between different financial institutions.
Right now, you can get rates of of up to 5.67% on a 1-year CD and up to 4.75% on a 5-year CD. Normally, longer-term CDs offer higher rates, but many banks are currently offering higher rates on shorter-term CDs instead. That said, online-only financial institutions generally offer some of the highest rates on CDs since they don’t have the same overhead costs that traditional banks have and tend to pass those savings along to consumers in the form of higher rates.
But while those rates are much higher than what was available in recent years, you can take it one step further and build a CD ladder. To do this, you’ll buy a series of CDs with varying terms, and while it’s not required, it can be useful to deposit the same amount into each.
For instance, your CD ladder might look like this:
- $2,500 1-year CD at 5.50%
- $2,500 2-year CD at 5.45%
- $2,500 3-year CD at 5.10%
- $2,500 4-year CD at 5.00%
At the end of the first year, that 1-year CD would be worth $2,637.50. Rather than take that money and put it back into your checking account, though, you would add another rung at the top of the ladder, depositing it all into a 4-year CD. Each year, when the term expires for one CD, you buy another 4-year CD until you either need to pull out your money or until rates are no longer attractive enough to warrant it.
Shop online to set up your CD ladder right now.
Why CD laddering makes sense now
The current interest rate environment is why CD laddering may be a smart idea right now.
“With inflation cooling, many are speculating that the Fed is done, or near the end, of hiking interest rates in this cycle,” says Jim Eutsler, a certified financial planner at HCM Wealth Advisors. “If that holds true, the favorable interest rates that can be earned on CDs are likely near, if not at, their peak. Creating a multi-year ladder of non-callable, FDIC-insured CDs is a great way to lock in the high interest rates available today and insulate yourself from the potential of falling rates which many are saying could become a reality in the back half of 2024.”
CD laddering lets you take advantage of both the high short-term CD rates that pay big interest for a shorter time, as well as the longer-term CD rates that are slightly lower but earn more over the CD term.
There is one thing to be careful with, though. When you use a CD, you are agreeing to keep your money in the account for the entire term. There are often substantial penalties for early withdrawals, so it’s important to make sure you won’t need access to the money you deposit until the CD has matured.
The bottom line
CD laddering is a strategy for building long-term wealth and taking advantage of the high interest rates currently offered on savings products. A CD ladder lets you continue to save over the long term and allows you to earn compounding interest by rolling your money into new CDs as they mature. With many speculating that interest rates are at or near their peak, now is an opportune time to consider this savings strategy.
A passenger successfully landed a small plane on Friday after the pilot had a medical emergency, the Federal Aviation Administration said.
The twin-engine Beechcraft King Air 90 was traveling from Henderson Executive Airport in Las Vegas, Nevada to Monterey Regional Airport in California, with a pilot and one other person on board, the FAA said.
The pilot suffered an unspecified medical emergency while flying, the FAA said, forcing the passenger to take the controls and make an emergency landing at Meadows Field Airport in Bakersfield, California.
The Kern Fire Department told CBS News affiliate KBAX that firefighters were called to a report of a medical emergency on the plane. The pilot was reported to be “incapacitated,” the fire department said. Firefighters saw the plane approach and land safely, then “chased” the plane down the runway in emergency vehicles to meet it.
The FAA did not release the passenger or pilot’s identities nor give an update on the pilot’s condition. The pilot was taken to an area hospital by ambulance. The passenger did not report any injuries.
The FAA and the National Transportation Security Board will investigate the incident, the FAA said.
Congolese authorities began vaccination against mpox on Saturday, nearly two months after the disease outbreak that spread from Congo to several African countries and beyond was declared a global emergency by the World Health Organization.
The 265,000 doses donated to Congo by the European Union and the U.S. were rolled out in the eastern city of Goma in North Kivu province, where hospitals and health workers have been overstretched, struggling to contain the new and possibly more infectious strain of mpox.
Congo, with about 30,000 suspected mpox cases and 859 deaths, accounts for more than 80% of all the cases and 99% of all the deaths reported in Africa this year. All of the Central African nation’s 26 provinces have recorded mpox cases. Officials in Congo previously told CBS News that they’ve struggled to diagnose patients and provide basic care in the vast country of 100 million people, where a fragile, under-resourced healthcare system is also burdened by the stigma associated with the virus.
Although most mpox infections and deaths recorded in Congo are in children under age 15, the doses being administered are only meant for adults and will be given to at-risk populations and front-line workers, Health Minister Roger Kamba said this week.
“Strategies have been put in place by the services in order to vaccinate all targeted personnel,” Muboyayi ChikayaI, the minister’s chief of staff, said as he kicked off the vaccination.
Moses Sawasawa / AP
At least 3 million doses of the vaccine approved for use in children are expected from Japan in the coming days, Kamba said.
Mpox, also known as monkeypox, had been spreading mostly undetected for years in Africa before the disease prompted the 2022 global outbreak that saw wealthy countries quickly respond with vaccines from their stockpiles while Africa received only a few doses despite pleas from its governments.
However, unlike the global outbreak in 2022 that was overwhelmingly focused on gay and bisexual men, mpox in Africa is now being spread via sexual transmission as well as through close contact among children, pregnant women and other vulnerable groups, Dr. Dimie Ogoina, the chair of WHO’s mpox emergency committee, recently told reporters.
More than 34,000 suspected cases and 866 deaths from the virus have been recorded across 16 countries in Africa this year. That is a 200% increase compared to the same period last year, the Africa Centers for Disease Control and Prevention said.
A lack of diagnostic materials and basic medicines to treat the virus, which can improve survival rates, have also hampered efforts to contain the outbreak, and access to vaccines remains a challenge.
Moses Sawasawa / AP
The continent of 1.4 billion people has only secured a commitment for 5.9 million doses of mpox vaccines, expected to be available from October through December, Dr. Jean Kaseya, head of the Africa CDC, told reporters last week. Congo remains a priority, he said.
At the vaccination drive in Goma, Dr Jean Bruno Kibunda, the WHO representative, warned that North Kivu province is at a risk of a major outbreak due to the “promiscuity observed in the camps” for displaced people, as one of the world’s biggest humanitarian crisis caused by armed violence unfolds there.
The news of the vaccination program brought relief to many in Congo, especially in hospitals that had been struggling to manage the outbreak. Doctors with several charities working in the country have told CBS News they’re overstretched and short on supplies, even having to use tents and mattresses on the floor of makeshift isolation wards to treat a constant influx of patients.
“If everyone could be vaccinated, it would be even better to stop the spread of the disease,” said Dr. Musole Mulambamunva Robert, the medical director of Kavumu Hospital, one of the mpox treatment centers in eastern Congo.
Eastern Congo has been beset by conflict for years, with more than 100 armed groups vying for a foothold in the mineral-rich area near the border with Rwanda. Some have been accused of carrying out mass killings.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
GIPHY App Key not set. Please check settings