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Why you should put $5,000 into a long-term CD this October
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For savers looking for a safe and effective way to take advantage of a higher-rate climate, there have been multiple options to choose from in recent years. From high-yield savings accounts to certificates of deposits (CDs) to money market accounts and even high-yield checking options, there were multiple ways to earn a substantial return on your money with little risk.
But the interest rate climate is changing again.
The Federal Reserve, prompted by a drop in inflation, cut its federal funds rate for the first time in more than four years in September. Additional cuts now appear likely for November and December, too. And while this will be a boost for borrowers saddled with higher interest rates, it could cause the benefits of the aforementioned savings vehicles to quickly decline. Understanding this dynamic, then, savers may want to act aggressively. One way to do so is by putting $5,000 into a long-term CD this October, while it’s still advantageous. Below, we’ll detail three reasons why you should strongly consider this move now.
See how much more you could be earning on your money with a top CD here now.
Why you should put $5,000 into a long-term CD this October
Not sure if it makes sense to open a $5,000 CD this month? Here are three reasons why it could be the right decision for your money.
Interest rates on long-term CDs are still high
Interest rates on CDs haven’t dramatically changed from where they were a few months earlier, despite the rate trends. But that doesn’t mean they’ll remain this high for much longer, either. So act while the opportunity is still available. You can open an 18-month CD with a rate of 4.40% right now. 2-year CDs, 3-year CDs and 5-year CDs all have comparable rates, too, if slightly lower.
But if rate cuts are issued in the months to come — or economic data is released that shows rate cuts to be more likely — returns on these accounts could decline in advance, even before a formal Fed action takes place. So don’t wait for that to happen.
Get started with a top CD here now.
You’ll earn a high return even as rates fall
High-yield savings accounts have rates comparable to CDs right now, as do some other accounts. However, the alternatives often have variable interest rates, which can and will decline as the overall rate climate does. CD rates, on the other hand, are fixed, allowing savers to earn the high rate they lock the account with today for the full term of the account.
With a long-term CD, that could be anywhere between 18 months and 10 years. That said, you should only deposit an amount that you can easily afford to leave in the account for the full term or you’ll risk having to pay an early withdrawal penalty to reopen the account.
You can earn hundreds of dollars or more
Sometimes it’s easier to determine the true value of a financial product by calculating the exact return you stand to make. And that’s easy to do with a CD since the rate is fixed. If you open a 2-year CD with a rate of 4.20%, for example, you’ll earn approximately $483 on your $5,000 deposit. If you keep the money in longer, you’ll make even more. A $5,000 5-year CD at 4.35% will leave you with a profit of around $1,187. Calculate the numbers in advance and shop around for lenders online to determine exactly how much you could make by acting now.
The bottom line
Sure, interest rates looking to be heading downward, but they haven’t yet dropped enough to offset the benefits of a long-term CD. By acting now, savers can still lock in a high rate and they’ll keep it long-term, even as the overall rate climate declines. They’ll also potentially earn hundreds of dollars (if not more) with a $5,000 deposit into the right account. But the the timing here is critical to get right. As interest rates are cut, and likely before then, lenders will start reducing their offers on accounts like these. So it behooves savers to act before that happens.
NEW YORK — Former New York Gov. David Paterson and his stepson were attacked in New York City on Friday night, authorities said.
The incident occurred just before 9 p.m. on Second Avenue near East 96th Street on the Upper East Side, according to the New York City Police Department.
Police said officers were sent to the scene after an assault was reported. When officers arrived, police say they found a 20-year-old man suffering from facial injuries and a 70-year-old man who had head pain. Both victims were taken to a local hospital in stable condition.
In a statement, a spokesperson for the former governor said the two were attacked while “taking a walk around the block near their home by some individuals that had a previous interaction with his stepson.”
The spokesperson said that they were injured “but were able to fight off their attackers.”
Both were taken to Cornell Hospital “as a precaution,” he added.
Police said no arrests have been made and the investigation is ongoing.
The 70-year-old Paterson, a Democrat, served as governor from 2008 to 2010, stepping into the post after the resignation of Eliot Spitzer following his prostitution scandal. He made history at the time as the state’s first-ever Black and legally blind governor.
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A 17-year-old boy was critically injured and a person is in custody after a gunman opened fire on a SEPTA bus in North Philadelphia Friday evening, police said.
At around 6:15 p.m., Philadelphia police were notified about a shooting on a SEPTA bus traveling on Allegheny Avenue near 3rd and 4th streets in North Philadelphia, Inspector D F Pace told CBS News Philadelphia.
There were an estimated 30 people on the bus at the time of the shooting, Pace said, but only the 17-year-old boy was believed to have been shot. Investigators said they believe it was a targeted attack on the teenager and that he was shot in the back of the bus at close range.
According to Pace, the SEPTA bus driver alerted a control center about the shooting, which then relayed the message to Philadelphia police, who responded to the scene shortly.
Officers arrived at the scene and found at least one spent shell casing and blood on the bus, but no shooting victim, Pace said. Investigators later discovered the 17-year-old had been taken to Temple University Hospital where he is said to be in critical condition, according to police.
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Through their preliminary investigation, police learned those involved in the SEPTA shooting may have fled in a silver-colored Kia.
Authorities then found a car matching the description of the Kia speeding in the area and a pursuit began, Pace said. Police got help from a PPD helicopter as they followed the Kia, which ended up crashing at 5th and Greenwood streets in East Mount Airy. Pace said the Kia crashed into a parked car.
The driver of the crashed car ran away but police were still able to take them into custody, Pace said.
Investigators believe there was a second person involved in the shooting who ran from the car before it crashed. Police said they believe this person escaped near Allegheny Avenue and 4th Street, leaving a coat behind.
According to Pace, police also found a gun and a group of spent shell casings believed to be involved in the shooting in the same area.
“It’s very possible that there may have been a shooting inside the bus and also shots fired from outside of the bus toward the bus,” Pace said, “We’re still trying to piece all that together at this time.”
This is an active investigation and police are reviewing surveillance footage from the SEPTA bus.