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Why you should put $10,000 into a long-term CD before September
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There’s no question that today’s high-rate landscape has paid off in spades for many savers. After all, many high-yield savings accounts and certificates of deposit (CDs) have offered extremely attractive rates over the last few years, making it easy to maximize the returns on your money. But if you’ve been sitting on the sidelines, watching your savings earn minimal interest in a traditional savings account, you may want to rethink that strategy.
The financial markets are signaling a potential shift, so if you want to rake in big interest returns on your money, time may be running out. Rather than continuing to procrastinate, depositing $10,000 of your savings into a long-term CD could be a better plan. Doing so could be your ticket to maximizing your returns — especially if you make that move before September rolls around.
Don’t lose your chance to rake in high CD returns. Start comparing your top options now.
Why you should put $10,000 into a long-term CD before September
There are a few reasons why you may want to deposit $10,000 in a long-term CD before September, including:
Today’s CD rates are still high
One of the most compelling reasons to put $10,000 into a long-term CD investment now is the current state of interest rates. Right now, CD rates remain at levels we haven’t seen in years, and many financial institutions are offering rates of 4% to 5% or more on their long-term CDs.
With a rate that high, a $10,000 investment in a 5-year CD could potentially grow to over $12,000 by the end of the term — and that’s without any additional contributions. That means the returns on your CD will significantly outpace the returns typically offered by traditional savings accounts, which are averaging about 0.45% currently.
The high rates we’re seeing today are a direct result of the Federal Reserve’s monetary policy over the past few years. However, this situation is not expected to last indefinitely, which brings us to our next point.
Find out what the top CD options are and start earning more interest today.
CD rates are likely to change soon
Now that inflation is cooling, financial analysts and economists are predicting a change in the interest rate environment, and it’s likely to occur soon. The Federal Reserve has signaled its intention to begin easing its monetary policy, with the first rate cut of 2024 expected in September. This move is anticipated to be followed by additional rate cuts in the coming months.
When the Federal Reserve lowers its benchmark interest rate, it typically leads to a decrease in the interest rates offered by banks on various financial products, including CDs. This means that the attractive rates we’re seeing today may not be available for much longer.
By investing in a long-term CD before these rate cuts start next month, you have the opportunity to lock in the current high rates for an extended period. This strategy can protect your investment from the anticipated downturn in interest rates, ensuring that your money continues to grow at a favorable rate even as market conditions change.
You’ll lock in predictable returns
When you invest in a CD, you’re essentially entering into a contract with the bank. In exchange for agreeing to leave your money untouched for a specified period, the bank guarantees you a fixed rate of return. This means that regardless of what happens in the broader economy – whether we face a recession, an uptick in inflation or market volatility – your CD investment will continue to grow at the agreed-upon rate until it matures.
This predictability can be especially beneficial if you’re saving for a specific goal with a defined timeline, such as a down payment on a house, a child’s education or a major purchase. So by locking in a high rate now, particularly before the rate environment shifts, you can more accurately project your returns and plan for the future.
You’ll benefit from compound interest
One often overlooked benefit of investing in a long-term CD is the element of forced savings it introduces. When you commit $10,000 to a CD, you’re making a conscious decision to set that money aside for a specific period. This can be an excellent strategy for those who struggle with saving or are tempted to dip into their savings for non-essential expenses, as the early withdrawal penalties associated with CDs serve as a deterrent to accessing the funds before maturity.
As your CD earns interest over time, you’ll also benefit from the power of compound interest. The interest you earn each year will begin earning interest, accelerating the growth of your investment. This compounding effect becomes even more powerful over longer terms, which is why investing in a long-term CD before rates potentially drop can be such a smart move.
The bottom line
The current financial landscape presents a unique opportunity for those looking to maximize their savings. By investing $10,000 in a long-term CD before September, you can take advantage of today’s high rates, protect yourself against anticipated rate drops, hedge against economic uncertainty, diversify your portfolio and benefit from compounding interest. That said, it’s important to consider your unique financial situation and goals before making any investment decisions. For many savers, though, opening a high-yield, long-term CD now could prove to be a wise financial move.
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A U.S. District judge has halted the merger between the makers of Coach and Michael Kors handbags, saying it would reduce competition and hurt consumers.
In her ruling Thursday, U.S. District Judge Jennifer Rochon noted that Tapestry Inc. and Capri Holdings are “close competitors” and that the merger would result in “the loss of head-to-head competition” and raise prices for shoppers.
The decision followed seven days of testimony.
In after hours trading shares of Capri fell more than 50% while shares of Tapestry rose 12%.
The ruling came six months after the FTC sued to block Tapestry’s $8.5 billion acquisition of Capri, saying that the deal would eliminate direct competition between the fashion companies’ brands like Coach and Michael Kors in the so-called affordable luxury handbag arena.
The agency also said that the deal announced in August 2023 threatens to eliminate the incentive for the two companies to vie for employees and could depress employees’ wages and workplace benefits. The combined Tapestry and Capri would employ roughly 33,000 people worldwide, the agency said.
The two companies’ brands cover a wide array of items from clothing to eyewear to shoes. Tapestry has been on an acquisition binge for the past several years, and already owns Kate Spade New York, Stuart Weitzman and Coach. Capri owns the Versace, Michael Kors and Jimmy Choo brands.
Specifically, Tapestry’s Coach and Kate Spade brands and Capri’s Michael Kors brand are close rivals in the handbag market. The FTC had said that they continuously monitor each other’s handbag brands to determine pricing and performance, and they each use that information to make strategic decisions, including whether to raise or reduce handbag prices.
Tapestry said in an emailed statement to The Associated Press on Thursday that the decision granting the FTC’s request for a preliminary injunction was “disappointing” and “incorrect on the law and the facts.”
“Tapestry and Capri operate in an industry that is intensely competitive and dynamic, constantly expanding, and highly fragmented among both established players and new entrants,'” Tapestry said in a statement. “We face competitive pressures from both lower- and higher-priced products and continue to believe this transaction is pro-competitive and pro-consumer. “
The company said it intends to appeal the decision, consistent with its obligations under the merger agreement.
Capri could not be immediately reached for comment.
Neil Saunders, managing director of GlobalData, said in a published note that the blocking of Tapestry’s acquisition of Capri will come as a blow to both companies.
“For Tapestry, it puts an end to the goal of becoming a bigger house of brands, and it leaves its plans for future growth in tatters,” he said. He noted that in a slower market, Tapestry will now need to rely on pushing its existing brands harder, which he believes will be challenging. He noted that the group could, in time, also look to make smaller acquisitions.
The ruling leaves Capri “in poor shape and, in betting on being acquired, has neglected the hard work that needs to be done to course correct many of its weak brands,” Saunders said.
Capri will either need to find another party to buy it or it will have to embark on a major reinvention plan, he said.
Costco is recalling packages of salmon over concerns they could be contaminated with listeria.
Acme Smoked Fish Corp, the shopping club’s salmon provider, sent a notice to Costco shoppers this week informing them of the recall of Kirkland Signature Smoked Salmon, due to potential contamination with listeria monocytogenes bacteria.
The notice was sent to customers who Costco records show purchased affected fish products between October 9-13. Only packages from lot number 8512801270 are affected.
Customers who purchased the recalled salmon are instructed not to eat it and to return it to a Costco store for a full refund.
“We regret this unfortunate incident and have taken immediate corrective steps to ensure that this issue never happens again,” Acme Smoked Fish Corp. CEO Eduardo Carbajosa said.
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