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Haven’t opened a CD yet? Here’s why you shouldn’t wait any longer.
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.
Start by seeing what CD rate you could lock in here now.
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.
Get started with a top-earning CD online today.
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.
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Congress veers toward government shutdown after GOP revolt led by Trump, Musk
Washington — Congress’ path forward on government funding is in limbo after House Republicans, with the support of Elon Musk and President-elect Donald Trump, torpedoed an initial deal to avert a shutdown before a Friday night deadline.
The House descended into chaos Wednesday when the GOP revolt sank a last-minute funding measure to keep the government operating through early next year.
The massive end-of-year spending legislation immediately sparked anger from conservatives when it was unveiled late Tuesday. Texas GOP Rep. Chip Roy referred to it on X as a “1,547-page Christmas tree,” while Rep. Kat Cammack, a Florida Republican, called it “a band-aid that is laced with fentanyl.”
The more than 1,500-page bill released Tuesday was far from a modest stopgap measure. In addition to extending government funding through March 14, it included disaster aid, health care policy extenders and a pay raise for members of Congress, among other provisions. The disaster relief portion of the bill came with a $110 billion price tag.
Elon Musk, the co-head of Trump’s advisory Department of Government Efficiency chimed in with a barrage of posts Wednesday calling the bill “criminal” and suggestions that Republicans who supported it did not belong in Congress. And the opposition culminated in statements from Trump lambasting the new spending and threatening a primary challenge against any Republican supporting the measure.
The president-elect called on Republicans to strip out the additional spending and added a new element instead — raising the debt ceiling. The debt ceiling, which limits how much the government can borrow to pay its bills, is suspended until the first quarter of next year, but Trump said he’d prefer to force President Biden to approve raising the debt ceiling so he wouldn’t have to sign it.
“I will fight ’till the end,” Trump wrote.
Top House Republicans met Wednesday night after the initial deal fell apart, but a new path forward remained unclear Thursday morning as Congress lurched toward Friday night’s deadline to fund the government.
Though stripping out most of the additional funding would satisfy many Republicans, Johnson is likely to need dozens of votes from Democrats, and some are already slamming Johnson for walking away from the agreement. They argue Republicans will shoulder any blame for a potential shutdown.
“Republicans have now unilaterally decided to break a bipartisan agreement that they made,” House Minority Leader Hakeem Jeffries, a New York Democrat, said Wednesday. “House Republicans will now own any harm that is visited upon the American people that results from a government shutdown or worse.”
Spending fight throws Johnson’s speakership into question
The initial plan to keep the government funded and the chaos that surrounded it also prompted intense criticism of Johnson, including from members of his own party.
In addition to the slew of add-ons to the spending bill, conservatives are angry with Johnson for carrying out the negotiating process largely occurred outside of the view of rank-and-file members. Rep. Eric Burlison, a Missouri Republican, called the process “a total dumpster fire.”
A handful of Republicans indicated their support for Johnson’s speakership in the new Congress is now in question, and with such a narrow majority, it would take only a few to take him down. Rep. Thomas Massie, a Kentucky Republican, said flatly Wednesday that he won’t support Johnson in the speaker’s election.
“I’m not voting for him,” Massie said. “This solidifies it.”
In November, House Republicans backed Johnson to lead for another two years during their leadership elections. But the full chamber will vote to elect a speaker on Jan. 3. During the last speaker fight at the beginning of a new Congress in 2023, the slim Republican majority took 15 rounds to elect former Speaker Kevin McCarthy, who was ousted from the role nine months later, partly due to his handling of government funding.
Still, Johnson generally enjoys more favor than McCarthy with the president-elect, who wields widespread influence over House Republicans. Trump told Fox News Digital on Thursday that Johnson would “easily remain speaker” if he “acts decisively and tough” and eliminates “all of the traps being set by Democrats” in the spending package.
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Alicia Keys reflects on Broadway success and gives back to students at alma mater
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Harlem’s Apollo Theater honored by Kennedy Center for cultural contributions
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