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How much will a $5,000 CD earn now that rates are cut?
After waiting years for an interest rate cut, borrowers finally got some relief in September when the Federal Reserve finally cut its federal funds rate. The reduction, the first since 2020, brought the rate to a range between 4.75% and 5%. Other rate cuts are possible now, too, as the Fed is set to meet again in November and December. This is great news for those looking for mortgages and personal loans. And it could lead to some minor relief for credit card users as well, as rates on that product are hovering near a record 23%.
But what about savers?
Those who have opened certificates of deposit (CDs) and high-yield savings accounts secured interest rates exponentially higher than they were in 2020 and 2021, making them a smart way to earn big returns. With the rate climate evolving again, however, some may be wondering about the benefits of opening one of these accounts now. One of the best ways to determine the worth of an account is by calculating the interest you stand to earn now that rates have been cut. And it’s simple to do so with a CD, which has a fixed interest rate that will remain the same until the account has matured. So, how much will a $5,000 CD earn now that rates are cut? That’s what we’ll calculate below.
See how much more you could be earning on your money with a top CD here.
How much will a $5,000 CD earn now that rates are cut?
While CD rates aren’t immune from broader rate changes, they haven’t dropped dramatically either. It’s important to remember that rate hikes were issued gradually over an extended period. Rate cuts and, thus, rate drops on interest-earning savings accounts, will occur gradually, too. Plus, the rates lenders offer savers aren’t precisely affected by the same increments in which rate hikes (or cuts) are issued.
That being noted, here’s how much savers can expect to earn on a $5,000 CD now, timed to some readily available rates and terms:
- 6-month CD at 5.10%: $125.91 for a total of $5,125.91
- 1-year CD at 4.75%: $237.50 for a total of $5,237.50
- 18-month CD at 4.40%: $333.60 for a total of $5,333.60
- 2-year CD at 4.20%: $428.82 for a total of $5,428.82
- 3-year CD at 4.20%: $656.83 for a total of $5,656.83
- 5-year CD at 4.35%: $1,186.32 for a total of $6,186.32
As can be seen from these figures, rates on CDs are still high and valuable for savers. In a direct reversal from historic trends, rates on short terms are generally higher than long-term options, even post-September rate cut. But if you’re looking to make the most money possible, long-term CDs are the way to do so. So crunch the numbers and start shopping around to find the highest rate and best term possible to lock in now before additional rate cuts are issued.
Get started with a CD here now.
The bottom line
Interest rate cuts, while welcome for borrowers, will inevitably eat into what savers can earn with accounts like CDs. But that doesn’t mean that rates on these accounts have declined dramatically yet, either. Instead, with a $5,000 deposit into the right CD, savers could potentially earn hundreds and possibly thousands of dollars on their money. And that return will be guaranteed, even if rates fall during the CD’s term. Just be careful to only deposit an amount that you’re comfortable leaving in the account for the full term or you’ll risk having to pay an early withdrawal penalty to regain access to your money.
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Doctor admits to role in Matthew Perry’s death, pleads guilty to federal ketamine charge
A doctor criminally charged in connection with the death of Matthew Perry pleaded guilty Wednesday to a federal charge of conspiracy to distribute ketamine, which carries a maximum possible sentence of 10 years in prison.
Mark Chavez agreed to surrender his medical license after being charged in connection with the actor’s death in August, along with four other defendants including another doctor who federal prosecutors say conspired with him to deal an illegal, unethical and dangerous amount of ketamine to Perry in the last month of his life.
Chavez previously agreed to plead guilty. On Wednesday, he entered a guilty plea in U.S. District Court in Los Angeles.
The other people charged in Perry’s death include the L.A.-area physician accused of conspiring with Chavez, Salvador Plasencia, Jasveen Sangha — an alleged North Hollywood drug dealer who prosecutors have said is known as the “Ketamine Queen” — Perry’s former live-in assistant, Kenneth Iwamasa, and Erik Fleming, a Hawthorne man federal authorities have described as a street dealer who acted as a middleman.
In a plea agreement, Chavez admitted to taking ketamine and other prescription drugs from a ketamine infusion clinic in San Diego where he used to work. He also confessed to falsifying a prescription to provide Perry with the drug; using a patient’s name to have the prescription filled without that person’s consent or knowledge and making false statements to a wholesale ketamine distributer so he could supply more of it to Perry.
Nine days before Perry died, on Oct. 19, 2023, Chavez was interviewed by investigators with the Medical Board of California and the U.S. Drug Enforcement Agency, according to federal prosecutors. When he spoke with them, he concealed the fact that he had distributed ketamine to Plasencia who then allegedly provided the drug to Perry, prosecutors said.
The plea agreement states that Chavez is aware that the federal charge he is agreeing to plead guilty to, conspiracy to distribute ketamine, carries a maximum possible sentence of 10 years imprisonment, 3 years of supervised release and a fine of $500,000 — or twice the gross gain or gross loss due to offense depending on which is greater — as well as a mandatory assessment of $100.
On Aug. 30, Chavez appeared in U.S. District Court in Los Angeles but did not enter a plea at the time. He had previously agreed to plead guilty to his role in Perry’s death.
While he avoided questions from reporters as he entered the court in August, his attorney, Matthew Binninger, spoke outside the courthouse afterwards.
“He’s incredibly remorseful for what happened — not just because it happened to Matthew Perry but because it happened to a patient,” Binninger said. “He’s trying to do everything in his power to right the wrong that happened here.”
Just days before Chavez appeared in court, his physician’s license had been suspended and he was not permitted to practice, according to records from the Medical Board of California.
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