News last week that inflation rose the month prior (after increasing in the month before that) wasn’t welcome for millions of Americans, but particularly for borrowers. Not only has inflation made the cost of many everyday products prohibitive, but it’s also resulted in higher interest rates in an attempt to rein it in, thus making loans and credit cards more expensive. 

And while those higher rates haven’t benefited borrowers, they’ve resulted in a great earnings opportunity for savers. It’s not difficult to find a high-yield savings or certificate of deposit (CD) account that’s outpacing the inflation rate right now.

As with all financial products and services, however, the timing behind opening these accounts is key. This is especially true for CD account holders, who have to deal with different restrictions than those who have savings accounts. For these savers, then, it may make sense to make certain CD moves now with inflation rising again. Below, we’ll break down three important steps to take.

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3 CD moves to make with inflation increasing

Here are three CD moves to make with inflation rising again.

Get started

Whether you already have a CD or are just starting out, it makes sense to be proactive by taking advantage of today’s high rates while you still can. If you already have a CD, consider laddering it by opening another with a different term and rate. This will allow you to earn today’s high interest while providing you additional flexibility to access your funds when the initial one matures. 

And if you don’t have a CD, consider opening one now to earn more on your savings (online banks generally offer higher returns than banks with physical locations). Whatever path you choose, though, just avoid keeping your money in a regular account. With the average rate on a traditional savings account just 0.46% today, you’re losing money and failing to keep pace with inflation by keeping your money there.

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Consider your terms

Historically, long-term CDs offered higher rates to customers than short-term ones in exchange for savers locking their money away for an extended period. But with the recent rate volatility, banks are now taking the opposite approach, often offering higher rates on short-term accounts (which expire in 12 months or less) than long-term ones. So be sure to carefully consider both terms before getting started. 

While the slightly higher rate for a short-term CD can be best for those simply focused on earning the highest return, it may be better to go with a long-term CD which can lock in elevated interest rates for years to come — and they’ll stay there even if the larger rate climate adjusts downward. By considering all options, however, savers will better be able to determine their preferential path forward.

Shop around

Once you’ve committed to being proactive, and you know which CD tem you want to pursue, then get busy shopping around. As noted, the best rates and terms may come from online banks and lending institutions, but you won’t know which is truly the best until you’ve shopped around. 

Similarly, you may be able to find an account with no maintenances fees and no early withdrawal penalties, which could be a bonus for those unsure about how long they could afford to keep their funds untouched. But don’t just automatically use the bank you currently have an account with. Shop around to find the best deal for your money.

The bottom line

A rise in inflation doesn’t have to be a total loss. After all, increased inflation likely means higher interest rates for longer. So take advantage of today’s inflationary climate with a CD. But be aggressive now to start earning elevated returns as soon as possible and make sure to carefully consider the benefits of both short-term and long-term CDs in order to open the optimal one. Finally, don’t become complacent with your current bank and shop around. You may be able to find an ideal account with high rates and minimal fees, allowing you to capitalize on today’s rate climate both now and in the months and years ahead.