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Why you should open a long-term CD this October
When it comes to pursuing financial products and services, the timing needs to be just right. This is especially true for select investment types and savings accounts. If you had opened a savings account at the height of the pandemic in 2020 or 2021, for example, the interest rate you would have earned would have been negligible and any returns would have been barely noticeable. If you opened one in recent years, though, you may have made exponentially more on your deposit, simply due to the rate climate being higher from inflation and interest rate hikes.
But what if you wanted to act now, in October 2024? While the first rate cut in more than four years was issued on September 18 – and additional ones look likely for November and December – there’s a compelling argument to be made for opening a long-term certificate of deposit (CD) account right now. Below, we’ll detail three reasons why it makes sense to do so.
See how much more you could be earning on your money with a top CD here now.
Why you should open a long-term CD this October
Not sure if a CD, particularly a long-term one, is the right move for your money now? Here are three reasons why you should strongly consider this type of account for October:
Interest rates are still high
Sure, interest rates are on the decline across both borrowing and savings products. But that decline is gradual and the immediate results to vehicles like CDs and high-yield savings accounts haven’t been so pronounced to make them worthless.
Right now, for example, you can lock in a rate of 4.75% on an 18-month CD, 4.50% on a 2-year CD and 4.20% on a 3-year CD. While those rates were a bit higher earlier this year and in 2023, they haven’t fallen so dramatically that you still can’t potentially earn hundreds, if not thousands, of dollars with the right deposit. Just don’t wait for them to fall much further.
Get started with a long-term CD online today.
Rates are locked
CD rates are locked. That’s a huge benefit in a rate climate that’s on the decline. By opening a 2-year CD at that 4.50% rate, for example, you’ll be able to precisely determine your exact profit once the account has matured.
And you won’t have to worry about any market changes or Fed rate cuts that would otherwise affect what you could earn if you had a variable rate. With a long-term CD, then, you’ll get long-term protection against this volatility, as select accounts can have terms of five years or even longer, allowing you to earn today’s high rates for years to come.
It’s a safe way to earn more money
The market and rate climate are both changing right now. And no one knows where they’re exactly heading or how that will affect your money. Lower inflation and lower interest rates will have a different effect on your money and retirement savings than the higher inflation and higher rates we’ve seen in recent years.
It makes sense, then, to hedge against this volatility by putting some (but not all) of your money in a safe account that’s immune from these changes. A long-term CD account can be that safe haven. And when it matures, you’ll have a much better sense of where things are heading, economy-wise, than you likely do this October.
The bottom line
A declining rate climate has multiple benefits but some distinct disadvantages, too, like lower returns on savings vehicles. So don’t wait for rates to decline any further. Get started with a long-term CD now. These accounts still have relatively high rates that you can lock in for multiple years, providing a safe way to earn more money while the larger rate climate shakes out. Just be sure to only deposit an amount that you feel comfortable leaving in the account for the full CD term or you could risk having to pay an early withdrawal penalty to regain access to your funds.
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Claudia Sheinbaum takes office as Mexico’s first female president
Claudia Sheinbaum took office Tuesday as Mexico’s first female president in the nation’s more than 200 years of independence.
The 62-year-old former Mexico City mayor and lifelong leftist campaigned on a promise of continuity and of protecting and expanding the signature initiatives of her mentor, former President Andrés Manuel López Obrador.
In the four months between her election and inauguration she held that line, backing López Obrador on issues big and small. But Sheinbaum is a very different person; she likes data and doesn’t have López Obrador’s backslapping personal touch.
Mexico now waits to see if she will step out of his shadow.
Sheinbaum’s background is in science. She has a Ph.D. in energy engineering. Her brother is a physicist. In a 2023 interview with The Associated Press, Sheinbaum said, “I believe in science.”
Observers say that grounding showed itself in Sheinbaum’s actions as mayor during the COVID-19 pandemic, when her city of some 9 million people took a different approach from what López Obrador espoused at the national level.
Sheinbaum set limits on businesses’ hours and capacity when the virus was rapidly spreading and expanded its testing regimen. She also publicly wore masks and urged social distancing.
She comes from an older, more solidly left tradition that predates López Obrador’s nationalistic, populist movement.
Colombia’s President, Gustavo Petro, dropped a bit of a bombshell before Sheinbaum’s inauguration, telling reporters she had been a sympathizer of Colombia’s leftist guerrilla group, M-19 – the group that Petro himself once belonged to – and that she helped out exiled rebel fighters when they passed through Mexico. “A lot of Mexicans came to help us, and among them was Claudia.”
While Sheinbaum’s office did not immediately respond to queries about Petro’s comments, the idea is not improbable: Sheinbaum comes from a far more traditionally ‘leftist’ background than López Obrador, and has herself said she belonged to a number of leftist youth groups during her university years, at a time when they would have supported rebel groups in Central America and South America.
Her parents were leading activists in Mexico’s 1968 student movement, which ended tragically in a government massacre of hundreds of student demonstrators in Mexico City’s Tlatelolco plaza just days before the Summer Olympics opened there that year.
Sheinbaum is also the first president with a Jewish background in the largely Catholic country.
Sheinbaum led wire to wire and won convincingly in June with almost 60% of the vote, about double the number of her nearest competitor, Xóchitl Gálvez.
As López Obrador’s chosen successor, she enjoyed the boost of the high popularity he maintained throughout his six years in office.
The opposition’s coalition led by Gálvez struggled to gain traction, while support for the governing party carried over to Congress, where voters gave Morena and its allies margins that allowed it to pass important constitutional changes before López Obrador left office.
Before passage of a controversial constitutional overhaul of Mexico’s judiciary that will make all judges stand for election, Sheinbaum stood with López Obrador who had pushed it.
Sheinbaum said “the reforms to the judicial system will not affect our commercial relations, nor private Mexican investments, nor foreign ones. Rather the opposite, there will be a greater and better rule of law and democracy for everyone.”
Shortly after, when López Obrador’s proposal to put the National Guard under military command was being considered, Sheinbaum defended it against critics. She said it would not militarize the country and that the National Guard would respect human rights.
And just days before she took office, Sheinbaum stood with López Obrador in his long-running diplomatic spat with Spain. She defended her decision to not invite Spain’s King Felipe VI to her inauguration, saying in part that the king had failed to apologize for Spain’s conquest of Mexico as López Obrador had demanded years earlier.
Sheinbaum’s victory came 70 years after women won the right to vote in Mexico.
The race really came down to two women, Sheinbaum and Gálvez, but Mexico’s prevailing machismo still pushed both women to explain why they thought they could be president.
Since 2018, Mexico’s Congress has had a 50-50 gender split, in part due to gender quotas set for party candidates. Still, Sheinbaum inherits a country with soaring levels of violence against women. Barely 24 hours after Sheinbaum’s election victory, the female mayor of a town in western Mexico, Yolanda Sanchez Figueroa, was gunned down on a public road, according to local media. The Michoacan attorney general’s office said that the mayor’s bodyguard was also killed.
There are also still many parts of the country, especially rural Indigenous areas where men hold all the power. And some 2.5 million women toil in domestic work where despite reforms they continue to face low pay, abuse by employers, long hours and unstable working conditions.
Mexico’s Supreme Court ruled in 2023 that national laws prohibiting abortions are unconstitutional and violate women’s rights.
Although the Mexican ruling orders the removal of abortion from the federal penal code and requires federal health institutions to offer the procedure to anyone who requests it, further state-by-state legal work is pending to remove all penalties.
Feminists say that simply electing a woman as president does not guarantee she will govern with a gender perspective. Both Sheinbaum and López Obrador have been criticized before for appearing to lack empathy toward women protesting against gender violence.