Savers who investigated their options in 2020 and 2021 were disappointed by barely existent returns on their money. Thanks to an ultra-low rate climate, lenders offered savers little incentive to deposit their funds into high-yield savings or certificates of deposit (CD) accounts. But as the economy changed in recent years and inflation became more problematic, interest rates rose in tandem. And savings rates followed, with savers now potentially able to earn 4% to 5% (or more) on both of these accounts.

That said, the rate climate could soon be changing again. And for those who haven’t opened up a CD, it’s critical to take advantage of this opportunity while it still exists. This is especially true this June, with economic developments possible for this week and later in the month. So if you haven’t opened a CD yet, you should get started now. Below, we’ll detail three reasons why you shouldn’t wait any longer.

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Why you shouldn’t wait any longer to open a CD

Today’s elevated CD interest rates won’t stay this high forever. Here’s why it makes sense to act quickly:

Inflation may continue to cool

While inflation has been more problematic so far in 2024 than many had anticipated, it’s still significantly cooled from where it was in June 2022. And it dropped even further in April, to 3.4% from March’s 3.5%. If the inflation rate continues to fall closer to the Federal Reserve’s target 2% goal, then the rate climate may soon adjust. 

With the next inflation report scheduled to be released this week by the Bureau of Labor Statistics, savers will gain further insight into the future of CD rates. But since CD rates are locked, it’s beneficial to open one with a high rate now, before any inflation news affects what lenders are willing to offer.

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Interest rates may be cut

The next inflation report isn’t the only big economic news set for June 12. That’s also the day the Federal Reserve will conclude its latest meeting — and announce any action or inaction toward the federal funds rate (currently stuck at its highest level in decades). But if the inflation news is positive, the Fed could potentially announce a rate cut, or discuss the possibility of one for later in the year. Either action would likely result in a drop in what lenders are willing to offer on CDs. 

While that decrease may be negligible now (think a quarter of a point or less), it could be the first of a series of cuts to come. So don’t wait for that possibility to become a reality. Start shopping for CDs now to find one with the highest rate possible.

You’ll gain long-term protection

As mentioned above, CD rates are locked. So whatever rate you open the account with this week will remain the same until the CD has matured, no matter the term (or length) of the account in question. That’s a major benefit in today’s evolving rate climate. 

Because even if inflation and interest rates remain the same this week, they will inevitably adjust at some point in the future. While that point is impossible to determine, it won’t matter when it occurs if you have already locked in your funds with a high-rate account. And considering that CDs come with terms of three years or more, you stand to earn significant amounts of interest simply by acting now.

The bottom line

CDs have been a smart and effective way for savers to earn significantly more interest on their funds recently. But the window of opportunity may be closing, so it’s critical to be proactive. With the prospect of a further cooling of the inflation rate and an interest rate cut (or even an indication of an interest rate cut) to follow, today’s high CD rates may soon start to fall. By acting now, however, savers can lock in a high rate for months and years, allowing them to earn more on their money even when the economy inevitably stabilizes and rates readjust.