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One great perk of opening a CD versus a savings account now
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Inflation has caused a series of economic issues in recent years. Besides higher prices for groceries and gas, it has also resulted in higher interest rates and elevated costs for borrowers.
But the news hasn’t been all bad. For savers, the interest rate climate of 2023 and 2024 has been a major boost to their finances. Returns on certificates of deposit (CDs) and high-yield savings accounts have surged over the last two years, with both accounts offering savers APYs of 4% or higher right now.
CDs and high-yield savings accounts aren’t the same, however. The pros and cons of each vary, but there is one significant perk of opening a CD versus a savings account that’s particularly pertinent in today’s unique rate climate. Below, we’ll break down that advantage and a few others to opening a CD right now.
Ready to get started? See how much more you could be earning with a CD today.
One great perk of opening a CD versus a savings account now
Today’s rate environment is unusual because rate cuts are expected this year — but no one knows when or by how much. There was some hope that the first cut to the benchmark interest rate range — currently at a 22-year high — could come as early as March 2024.
However, that was deflated after two consecutive reports showed inflation higher than many had anticipated. While rate cuts may still come, they’re now likely to come later in the spring or in the summer.
What does this have to do with opening a CD versus a savings account now? CDs have rates that are locked (and, they’re generally higher than the best high-yield savings accounts). Select savers may even qualify for an account with a 6% or 7% APY right now.
And if they open the account now, whether the CD term is for a few months or a few years, that rate will remain the same even in the face of expected rate cuts. This is a major advantage in today’s rate climate in which rates are high now but expected to fall later in the year.
By contrast, rates on high-yield savings accounts are variable, meaning that they’re subject to change as the rate environment evolves. So, while high now, they will fall when rate cuts are issued.
But if you wait to open a CD when that happens the returns on CD accounts will also have been cut. It makes sense, then, to take advantage of the locked CD rate perk and open an account now while rates are still up.
Get started with a high interest-earning CD here.
Other CD perks to know now
While the locked interest rate is a major advantage, it’s not the only one. Here are two other CD perks to know now:
- Higher rates: While the best high-yield savings account rates are competitive, they’re generally not as high as the very best CDs. A simple search online will show that the returns on CDs right now are the best they’ve been in years. And compared to the 0.47% that a regular savings account comes with, you’re essentially losing money by not making the switch.
- Predictable returns: Because the rates on CDs are locked savers will be able to accurately predict the returns on these accounts. So, for example, a CD with a 5% interest rate and a $2,500 deposit will earn $125 after 12 months. A CD at the same rate with a $5,000 deposit will earn double that amount and so on. This predictability is a major advantage compared to high-yield savings accounts and it makes CDs a safe and smart way to save for a major expense in the future.
The bottom line
Both CDs and high-yield savings accounts are smart options to pursue in today’s rate climate but only one will have the enduring returns that savers can predict (and rely on). The locked nature of CD rates is a major perk compared to savings accounts in any rate environment, but especially now when rates are high but are expected to drop as the year evolves. As with all financial considerations, however, make sure you’re comfortable leaving your money untouched in a CD before opening one, otherwise you could get hit with an early withdrawal penalty.
CBS News
Woman found “dazed and injured” after surviving snake bite and multiple days in the wilderness
A woman who disappeared earlier this month in the rugged mountains of southeastern Australia has been found alive, police said, and she is hospitalized after sustaining what authorities believe was a snake bite. Officials said the woman was stable and recovering from her injuries.
The Australian Broadcasting Corporation and BBC News, a CBS News partner, have identified the woman as Lovisa “Kiki” Sjoberg, a photographer who visited Kosciuszko National Park often to take pictures of wild horses in the region.
The 48-year-old was reported missing to officers from the Monaro Police District near Kosciuszko National Park on Oct. 21, prompting a widespread search operation, the New South Wales Police Force said. The massive park is known for its wild alpine landscape that covers about 270,000 square miles of land, which is roughly the size of the state of Texas.
Search teams and law enforcement set up a command post in Kiandra, an abandoned gold mining town in a remote part of the national park’s Snowy Mountain region, police said. Officers from several different agencies worked with Australia’s National Parks and Wildlife Service, Rural Fire Service and members of the public to search the area, with additional help from police dogs and a rescue helicopter.
A parks and wildlife officer found the woman just before 5 p.m. local time Sunday on the Nungar Creek trail at Kiandra, which is a stop along the hiking route.
“She was treated at the scene by NSW Ambulance paramedics for exposure and what is believed to be a snake bite, before she was taken to Cooma District Hospital in a stable condition,” police in a statement.
Before being found, Sjoberg was last seen driving a rental car in the park on Oct. 15, the BBC reported. The rental company flagged the incident to police on Oct. 21 after noticing the car had not moved for six days and was overdue for return.
Martin Ollman / Getty Images
Monaro Police District Superintendent Toby Lindsay told media that Sjoberg was “dazed and injured” and “quite unwell” when they finally located her, according to the Australian broadcaster and BBC News.
“She advises she was bitten by a copperhead snake four days before being found and also rolled her ankle and she was suffering from dehydration,” Lindsey said, noting that the woman had been “wandering” for days through challenging bushland terrain.
According to the Australian Museum, copperhead snakes have powerful venom and “a bite from an adult of any of the species may be potentially fatal without medical assistance.”
“She’s in fact very fortunate to be alive … she obviously went through a tough time,” Lindsay added. The superintendent said after the woman’s rescue that she was in a “reasonable condition” and “happy to be alive.”
CBS News contacted the New South Wales Police Force for more information.
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CBS News
Rare dime bought by Ohio family and hidden for decades sells for over half a million dollars
An extraordinarily rare dime whose whereabouts had remained a mystery since the late 1970s has sold for just over $500,000.
The coin, which was struck by the U.S. Mint in San Francisco in 1975, depicts President Franklin D. Roosevelt and is one of just two known to exist without its distinctive “S” mint mark.
Three sisters from Ohio inherited the dime after the death of their brother, who had kept it in a bank vault for more than 40 years.
The coin sold for $506,250 in an online auction that concluded Sunday, according to Ian Russell, president of GreatCollections, an auction house based in Irvine, California. The auction house said there were 212 bids placed on the coin.
The only other known example of the “1975 ‘no S’ proof dime” sold at a 2019 auction for $456,000. Shortly after that, the coin sold for $516,000 to a Roosevelt Dime collector, who currently has the only complete collection of the series, the auction house said.
The mint in San Francisco made more than 2.8 million special uncirculated “proof” sets in 1975 that featured six coins and were sold for $7. Collectors a few years later discovered that two dimes from the set were missing the mint mark.
/ AP
Russell said the sisters from Ohio, who wanted to remain anonymous, told him that they inherited one of those two dimes but that their brother and mother bought the first error coin discovered in 1978 for $18,200, which would amount to roughly $90,000 today. Their parents, who operated a dairy farm, saw the coin as a financial safety net.
When Russell told one of the sisters just a few years ago about the coin’s potential value, he said she remarked “is that really possible?”
While there is a chance more examples of the rare dime are out there, they would only be found among the 1975 “proof” sets and not in anyone’s pocket change, Russell said.
Still, he said he expected the latest discovery to set off a lot of searching.
Woman found “dazed and injured” after surviving snake bite and multiple days in the wilderness
LinkedIn senior editor Jessi Hempel on rising return-to-office mandates and what they mean
Rare dime bought by Ohio family and hidden for decades sells for over half a million dollars
Woman found “dazed and injured” after surviving snake bite and multiple days in the wilderness
LinkedIn senior editor Jessi Hempel on rising return-to-office mandates and what they mean