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Why you should open a 3-month CD today
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Rates have increased significantly over the last few years due to the Federal Reserve attempting to temper inflation. The trend started in March 2022, when high post-pandemic inflation levels led the Fed to increase its target federal funds rate. And, the Fed then opted to increase its benchmark rate several more times before pausing rate hikes temporarily.
And, in general, that strategy appears to be working — at least somewhat. The inflation rate is cooling, but it hasn’t quite reached the Federal Reserve’s 2% goal. According to recent data, the inflation rate is now 3.1%.
Nonetheless, as inflation moves in the right direction, the Federal Reserve has decided to keep rate hikes paused over the last few months, leaving the benchmark interest rate at a 23-year high. And, you may be able to use today’s high interest rates to your advantage with the help of a 3-month certificate of deposit (CD) — which gives you an effective way to earn high returns on your savings.
Get more out of your savings with a 3-month CD today.
Why you should open a 3-month CD today
A 3-month CD allows you to take advantage of today’s high rates without having to lock your money up for more than a few months. Here’s why this type of CD makes sense now:
Rates are currently high on 3-month CDs
One good reason to open a 3-month CD right now is that APYs are high on the best accounts. Some of the best 3-month CDs are available at Popular Direct (5.00% APY) and Alliant Credit Union (4.25% APY). Both of these options have rates that outpace inflation, so you can use them to offset the losses from inflation and earn a positive return.
Tap into today’s high rates with a 3-month CD now.
Rates are expected to drop in the future
At 3.1%, the current inflation rate is still above the Federal Reserve’s 2% target. However, it’s significantly lower than the 9.1% inflation rate from June 2022, which suggests that the Fed’s efforts to hamper inflation are working.
If inflation continues to cool, the Fed will likely reduce its target federal funds rate soon. In fact, many experts expect the Federal Reserve to start rate cuts in June.
And, if you were to open a 3-month CD today, it would mature in late May. At that point, you could reassess the inflationary environment and decide whether it makes sense to lock in a higher rate for a longer term.
CD accounts are generally safe
“CDs, or certificates of deposit, are typically a safe way to increase your savings rate of return especially if you are averse to investing in stocks or bonds,” says Yosh Miller, CEO and founder of Hadley, a savings app.
CDs provide safety in two ways.
“When you open a certificate of deposit, you essentially deposit money with a bank that will give you a rate of return for an agreed upon term,” says Miller.
CDs typically come with FDIC or NCUA insurance, too, which protects you from losses of up to $250,000 per account in the event your financial institution becomes insolvent or goes out of business.
CDs can promote savings discipline
A 3-month CD may also be an effective tool to help you achieve your short-term savings goals. For example, if you want to take a vacation in three months, you could deposit the money you’re using to cover the expense in a 3-month CD. When you do, you’ll agree to keep your money in the account for the entire term.
If you tap into your CD early, you may have to pay an early withdrawal penalty. That could make it less appealing to tap into your funds early and increase the likelihood of meeting your savings goals.
The bottom line
Inflation is still above the Federal Reserve’s target and returns on leading deposit accounts are still competitive. It may be wise to open a 3-month CD to take advantage of today’s rate environment ahead of any potential rate changes in June.
CBS News
Kamala Harris will speak with “60 Minutes” tomorrow. Here’s what to know for the interview.
Voters will get the chance to hear from Vice President Kamala Harris on Monday as she presents her case for why she should be president in a “60 Minutes” election special.
For decades, “60 Minutes” has featured both Republican and Democratic nominees for presidents, but this year, former President Donald Trump backed out after previously indicating he would be on the show. Correspondent Scott Pelley, who’d been set to interview Trump, will instead travel to Arizona’s Maricopa County, home to more than 60% of Arizona’s voters and a critical battleground in a key swing state.
One thing is certain about the election; with the U.S. deeply involved in both the wars in Ukraine and the Middle East, whoever wins on Nov. 5 will become a wartime president.
What Harris will discuss
Israel’s war started one year ago after Hamas launched a surprise terror attack and correspondent Bill Whitaker will discuss the ongoing war with Harris.
Harris will also discuss the economy, immigration, her record as vice president and the differences between herself and Trump.
Democratic vice presidential candidate Gov. Tim Walz will also appear.
Whitaker joined the Democratic ticket on the campaign trail this week to gain insight into their platform’s priorities and values, and what the candidates believe voters should know.
Why Trump pulled out of the “60 Minutes” interview
Leading up to the candidate hour, Trump, through campaign spokespeople, was the first candidate to accept the “60 Minutes” request to be interviewed for the special, according to CBS News. It had been agreed that both candidates would receive equal time during the broadcast.
Trump last sat down with 60 Minutes in 2020. He walked out during the interview with Lesley Stahl. Trump referenced the incident on Tuesday night at a Milwaukee press conference when asked about his decision not to participate in the Oct. 7 “60 Minutes” election special.
“Well, right now, I went to – they came to me and would like me to do an interview, but first I want to get an apology, because the last time I did an interview with them, if you remember, they challenged me on the computer,” Trump said. “They said the ‘laptop from hell’ was from Russia, and I said it wasn’t from Russia. It was from Hunter, and I never got an apology, so I’m sort of waiting. I’d love to do ’60 Minutes.’ I do everything.”
The Republican nominee for president emphasized that he felt he was owed an apology from “60 Minutes.”
“Let’s see if they do it. I wouldn’t mind doing 60,” Trump continued. “I’ve done ’60 Minutes’ a lot.”
In a statement on Tuesday, Trump campaign communications director Steven Cheung said that Trump’s team had not agreed to an interview.
“Fake News,” Cheung said in a post on X. “60 Minutes begged for an interview, even after they were caught lying about Hunter Biden’s laptop back in 2020. There were initial discussions, but nothing was ever scheduled or locked in. They also insisted on doing live fact checking, which is unprecedented.”
Previous Trump, Harris appearances on 60 Minutes
Trump previously sat down with “60 Minutes'” Mike Wallace in 1985, Pelley in 2015 and Lesley Stahl twice in 2016, first in July of that year and then again in November of 2016. He also spoke with Stahl again in 2018 and 2020.
Harris previously sat down with Whitaker last year. She also was interviewed by Norah O’Donnell, “CBS Evening News” anchor and “60 Minutes” contributing correspondent, in 2020.
How to watch the “60 Minutes” election special
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