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Why you should put $5,000 into a long-term CD now
September is finally here and, with it, the likely first cut to interest rates since 2020.
While that’s going to provide major relief for millions of American borrowers, it won’t be nearly as advantageous for savers who’ve been able to earn high returns on select savings vehicles since 2022. For those savers and those who have yet to take advantage, the opportunity to do so could soon be unavailable. This is especially true for adults who have considered opening a certificate of deposit (CD) account in recent years but have failed to do so.
Fortunately, there’s still (some) time left to act. And there’s a compelling case to be made for opening a long-term CD (more than 12 months) right now. Below, we’ll break down three reasons why you should consider putting $5,000 into one of these accounts while it’s still beneficial.
See how much more money you could be earning with a top CD here now.
Why you should put $5,000 into a long-term CD now
Still not sure if a $5,000 deposit into a long-term CD is the right move? Here are three major reasons why you should consider acting now:
It could be your last chance to lock in a high interest rate
Inflation is cyclical and bound to return at some point in the future. But as this inflation cycle cools and comes to a close, the window of opportunity for savers to take advantage will soon close as well. Right now could be your last chance to lock in a high interest rate on a CD while they’re still readily available.
Remember that rates on these same accounts were just around 1% in 2020 and 2021 (they’re in the 4% to 5% range now). So today’s rates are a bit of an anomaly. No one knows when they could return or what could spark them to rise again. So by locking in a long-term CD rate now, you could earn today’s high returns for years to come, even as the larger rate climate cools back down.
Get started with a high-interest-rate CD while you still can here.
The alternatives are not as beneficial right now
For much of the last two years, savers had attractive alternatives to CDs. For those who didn’t want to lock their money away in a CD, both high-yield savings and high-yield checking accounts offered ways to earn elevated rates while still maintaining access to your funds. But those alternatives are not as beneficial right now with rate reductions looming. Interest rates on both are variable, meaning they’re designed to change as the interest rate climate does.
While that’s a pro when rates are heading upward, it’s a detriment now as rates come back down. And while you may be able to get a comparable rate to a long-term CD if you open it today, that rate is likely to be much different a year from now versus the long-term CD, which will still be earning high, predictable interest on your money each month.
The deposit amount won’t be prohibitive
A $5,000 CD deposit, while not small, won’t be as prohibitive as a $10,000 deposit or higher. In other words, it’ll be easier to part with $5,000 for 18 months or longer than it would be for $10,000 or $20,000. But you’ll still earn hundreds and possibly thousands of dollars worth of interest with that manageable deposit.
For example, a $5,000 deposit into a 5-year CD with a rate of 4.35% (available right now) will result in a $1,186.32 profit upon maturity. And you’ll still be able to invest your money in other accounts or keep it liquid without locking it all away in a CD.
The bottom line
Speculation over interest rate cuts could soon become moot if the Federal Reserve issues a cut to the federal funds rate when it meets again this month. Savers who have yet to take advantage of the high interest rates of 2022 and beyond, then, should strongly consider rectifying that inaction by depositing $5,000 into a long-term CD now. By being proactive, they can still take advantage of this opportunity while it exists and they can do so as rates on alternative accounts start to dwindle. And considering that the deposit amount won’t be prohibitive, savers will still be free to explore other options in the interim — while still earning today’s high CD rates for multiple years ahead.
Have more questions? Learn more about your current CD options here.
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How much money do U.S. House members make?
Serving in the U.S. House of Representatives comes with a six-figure salary, along with perks including paid travel and housing costs.
While the $174,000 annual pay likely doesn’t sound too shabby to those living in a country where the median individual wage comes to just over $59,000 a year, members of Congress are earning wages that were set in 2009. They haven’t gotten an automatic cost-of-living adjustment since 2009.
In getting elected as Speaker of the House in October of 2023, Louisiana Republican Mike Johnson’s annual salary jumped to $223,500. Louisiana Republican Steve Scalise and New York Democrat Hakeem Jeffries each make $193,4000 a year as the House majority and minority leaders, respectively.
Members of Congress are not allowed to continue in their prior jobs while working on Capitol Hill, although their net worth continues to increase through investments. Indeed, many Washington, D.C., lawmakers were already millionaires when they began their political careers, especially in the Senate.
Although pensions are increasingly uncommon for most American workers, the perk is alive and well for lawmakers. Since 1946, members of Congress with at least five years of service or federal employment are eligible for “a generous pension that pays two to three times more than pensions offered to similarly salaried workers in the private sector,” according to the National Taxpayers Union Foundation.
The value of the pension benefit is determined based on when a lawmakers was elected to office, time served and the average of the three years of their highest salary, noted NTUF, an affiliate of the National Taxpayers Union.
A lesser-known congressional benefit is the practice of leaving death gratuity payments to the heirs of members who die while serving in office. Equal to the member’s yearly congressional salary, the payments are provided regardless of how wealthy the deceased lawmaker was. From 2000 to 2021, the payments have cost taxpayers $5 million, the nonprofit research group found.
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2 shot dead, 4 wounded by Mexico’s National Guard on migrant smuggling route near U.S. border
Mexico’s National Guard fatally shot two Colombians and wounded four others in what the Defense Department claimed was a confrontation near the U.S. border.
Colombia’s foreign ministry said in a statement Sunday that all of the victims were migrants who had been “caught in the crossfire.” It identified the dead as a 20-year-old man and a 37-year-old woman, and gave the number of Colombians wounded as five, not four. There was no immediate explanation for the discrepancy. The victims were identified by the foreign ministry as Yuli Vanessa Herrera Marulanda and Ronaldo Andrés Quintero Peñuelas.
Mexico’s Defense Department, which controls the National Guard, did not respond to requests for comment Monday on whether the victims were migrants, but it said one Colombian who was not injured in the shootings was turned over to immigration officials, suggesting they were.
If they were migrants, it would mark the second time in just over a month that military forces in Mexico have opened fire on and killed migrants.
On Oct. 1, the day President Claudia Sheinbaum took office, soldiers opened fire on a truck, killing six migrants in the southern state of Chiapas. An 11-year-old girl from Egypt, her 18-year-old sister and a 17-year-old boy from El Salvador died in that shooting, along with people from Peru and Honduras.
The most recent shootings happened Saturday on a dirt road near Tecate, east of Otay Mesa on the California border, that is frequently used by Mexican migrant smugglers, the department said in a statement late Sunday.
The Defense Department said a militarized National Guard patrol came under fire after spotting two vehicles — a gray pickup and a white SUV — in the area, which is near an informal border crossing and wind power generation plant known as La Rumorosa.
One truck sped off and escaped. The National Guard opened fire on the other truck, killing two Colombians and wounding four others. There was no immediate information on their conditions, and there were no reported casualties among the guardsmen involved.
One Colombian and one Mexican man were found and detained unharmed at the scene, and the departments said officers found a pistol and several magazines commonly used for assault rifles at the scene.
Colombians have sometimes been recruited as gunmen for Mexican drug cartels, which are also heavily involved in migrant smuggling. But the fact the survivor was turned over to immigration officials and that the Foreign Relations Department contacted the Colombian consulate suggests they were migrants.
Cartel gunmen sometimes escort or kidnap migrants as they travel to the U.S. border. One possible scenario was that armed migrant smugglers may have been in one or both of the trucks, but that the migrants were basically unarmed bystanders.
The defense department said the three National Guard officers who opened fire have been taken off duty while the incident is being investigated.
Former president Andrés Manuel López Obrador, who left office Sept. 30, gave the military an unprecedentedly wide role in public life and law enforcement; he created the militarized Guard and used the combined military forces as the country’s main law enforcement agencies, supplanting police. The Guard has since been placed under the control of the army.
But critics say the military is not trained to do civilian law enforcement work. Moreover, lopsided death tolls in such confrontations – in which all the deaths and injuries occur on one side – raise suspicions among activists whether there really was a confrontation.
For example, the soldiers who opened fire in Chiapas – who have been detained pending charges – claimed they heard “detonations” prior to opening fire. There was no indication any weapons were found at the scene.
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Kenyan man convicted of plotting 9/11-style attack on U.S.
A Kenyan man was convicted Monday of plotting a 9/11-style attack on a U.S. building on behalf of the terrorist organization al-Shabab.
A federal jury in Manhattan found Cholo Abdi Abdullah guilty on all six counts he faced for conspiring to hijack an aircraft and slam it into a building, according to court records.
He’s due to be sentenced next March and faces a mandatory minimum of 20 years in prison.
Abdullah represented himself during the trial, which opened last week. He declined to give an opening statement and did not actively participate in questioning witnesses.
In court papers filed ahead of the trial, prosecutors said Abdullah intended to “merely sit passively during the trial, not oppose the prosecution and whatever the outcome, he would accept the outcome because he does not believe that this is a legitimate system.”
Lawyers appointed to assist Abdullah in his self-defense didn’t respond to an email seeking comment Monday.
Federal prosecutors, who rested their case Thursday, said Abdullah plotted the attack for four years, undergoing extensive training in explosives and how to operate in secret and avoid detection.
He then moved to the Philippines in 2017 and began training as a commercial pilot.
Abdullah was almost finished with his two-year pilot training when he was arrested in 2019 on local charges.
He was transferred the following year to U.S. law enforcement authorities, who charged him with terrorism-related crimes.
Prosecutors said Abdullah also researched how to breach a cockpit door and information “about the tallest building in a major U.S. city” before he was caught.
The State Department in 2008 designated al-Shabab, which means “the youth” in Arabic, as a foreign terrorist organization. The militant group is an al Qaeda affiliate that has fought to establish an Islamic state in Somalia based on Shariah law.