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Why you should put $5,000 into a long-term CD now
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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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Yellowstone hiker burned when she falls into scalding water near Old Faithful, park officials say
Yellowstone National Park, Wyo. — A New Hampshire woman suffered severe burns on her leg after hiking off-trail in Yellowstone National Park and falling into scalding water in a thermal area near the Old Faithful geyser, park officials said.
The 60-year-old woman from Windsor, New Hampshire, along with her husband and their leashed dog were walking off a designated trail near the Mallard Lake Trailhead on Monday afternoon when she broke through a thin crust over the water and suffered second- and third-degree burns to her lower leg, park officials said. Her husband and the dog weren’t injured.
The woman was flown to Eastern Idaho Regional Medical Center in Idaho Falls, Idaho for treatment.
National Park Service / Jacob W. Frank
Park visitors are reminded to stay on boardwalks and trails in hydrothermal areas and exercise extreme caution. The ground in those areas is fragile and thin and there’s scalding water just below the surface, park officials said.
Pets are allowed in limited, developed areas of Yellowstone park but are prohibited on boardwalks, hiking trails, in the backcountry and in thermal areas.
The incident is under investigation. The woman’s name wasn’t made public.
This is the first known thermal injury in Yellowstone in 2024, park officials said in a statement. The park had recorded 3.5 million visitors through August this year.
Hot springs have injured and killed more people in Yellowstone National Park than any other natural feature, the National Park Service said. At least 22 people have died from hot spring-related injuries in and around the 3,471-square-mile national park since 1890, park officials have said.
TRENTON, N.J. — Democratic Newark City Council President LaMonica McIver has defeated Republican small businessman Carmen Bucco in a contest in New Jersey’s 10th Congressional District that opened up because of the death of Rep. Donald Payne Jr. in April.
McIver will serve out the remainder of Payne’s term, which ends in January. She and Bucco will face a rematch on the November ballot for the full term.
McIver said in a statement Wednesday that she stands on the “shoulders of giants,” naming Payne as chief among them.
She cast ahead to the November election, saying the right to make reproductive health choices was on the ballot as well as whether the economy should benefit the wealthy or “hard working Americans.”
“I will fight because the purpose of politics and the purpose of our vote is to give the people of our communities and our nation a bold voice,” she said.
Bucco congratulated McIver on the victory in a statement but said he’s looking forward to the rematch in November.
“I am not going anywhere,” he said in an email. “We still have a second chance to make district 10 great again!”
Who are LaMonica McIver and Carmen Bucco?
McIver emerged as the Democratic candidate in a crowded field in the July special election. A member of the city council of New Jersey’s biggest city since 2018, she also worked for Montclair Public Schools as a personnel director and plans to focus on affordability, infrastructure, abortion rights and “protecting our democracy,” she told The Associated Press earlier this summer.
Bucco describes himself on his campaign website as a small-business owner influenced by his upbringing in the foster system. He lists support for law enforcement and ending corruption as top issues.
The 10th District lies in a heavily Democratic and majority-Black region of northern New Jersey. Republicans are outnumbered by more than 6 to 1.
It’s been a volatile year for Democrats in New Jersey, where the party dominates state government and the congressional delegation.
Among the developments were the conviction on federal bribery charges of U.S. Sen. Bob Menendez, who has denied the charges, and the demise of the so-called county party line — a system in which local political leaders give their preferred candidates favorable position on the primary ballot.
Democratic Rep. Andy Kim, who’s running for Menendez’s seat, and other Democrats brought a federal lawsuit challenging the practice as part of his campaign to oust Menendez, who has resigned since his conviction.
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Yellowstone hiker burned when she falls into scalding water near Old Faithful, park officials say
Wagon rolls over at Wisconsin apple orchard injuring about 25 children and adults