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Why a long-term CD is better than a short-term one this October
Certificates of deposit (CD) accounts are generally a smart part of any saving strategy. But, in recent years, they’ve become an indispensable element. Thanks to decades-high inflation and interest rates that soared in an attempt to tame it, rates on interest-earning vehicles like CDs and high-yield savings accounts surged. In a relatively short time period, rates on CDs went from around 1% or less to 4% to 5% and sometimes higher.
With inflation now much cooler than it was, however, and the first of a series of interest rate cuts now issued, the value of a CD may be in question. For these savers, it’s important to understand which specific CD term (or length) is beneficial to them now. As rates cool, then, there’s a compelling argument to be made for long-term CDs, in particular. Below, we’ll detail three reasons why a long-term CD (longer than 12 months) is better than a short-term one this October.
See how much more you could be earning on your money with a top CD here.
Why a long-term CD is better than a short-term one this October
Here are three big reasons why a long-term CD could be better for your savings than a short-term one if opened this month:
Comparable interest rates
It can be tempting when opening a CD to pursue the highest rate option possible right now. But, when shopping around, you’ll quickly see that long-term CDs have comparable interest rates to short-term ones. So don’t get tempted with a 5.10% rate on a CD that will expire in just six months when you can lock in a rate of 4.75%, for example, for a full year or a 4.40% rate for an 18-month CD. Sure, these rates are not quite as high as the short-term options, but a simple calculation proves that you’ll earn a bigger return by pursuing the latter types.
Get started with a top long-term CD here.
Long-term interest-earning potential
CD interest rates are locked no matter the term. So, that 5.10% rate mentioned above will remain the same for the full six months, no matter what happens in the wider rate climate during that time. But the 4.40% on 18 months will also be locked as will a 4.20% rate on a 2-year CD. And with multiple rate cuts likely for the rest of 2024 and into 2025, it makes sense to lock in the highest rate for the longest amount of time right now. A long-term CD offers you that ability.
Financial security
There are multiple economic considerations to account for now that could cause your money and investments to fluctuate as September’s rate cut was just one part of this equation. Unemployment figures can also affect your investments as can geopolitical concerns abroad and a U.S. presidential election just weeks away. Amid this potential volatility, then, it makes sense to add some financial security. A long-term CD can offer just that, as it will be unaffected by the market, politics and Fed actions (or lack thereof). Just don’t wait too long to act, either, as CDs may not be as advantageous in a few months as they are right now.
The bottom line
For many savers, a long-term CD is better than a short-term one this October. With comparable interest rates to the best short-term CDs, long-term interest-earning potential in the face of predicted rate reductions and financial security amid an evolving and potentially volatile economic climate, a long-term CD makes sense for many savers now. Just make sure to only deposit an amount of money that you’re comfortable leaving in the account for the full term or you could risk having to pay an early withdrawal penalty to reaccess your money.
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FDA vaccines chief hopes for common ground with RFK Jr.
The Food and Drug Administration’s top vaccines official says he hopes to find common ground with Robert F. Kennedy Jr., who was picked Thursday by President-elect Donald Trump to head the Department of Health and Human Services.
“What I would ask of him is that he keep an open mind. We’re happy to try to show as much of the data as we can. And I think the data are essentially overwhelming, in certain areas, but we’ll just have to engage in the dialogue,” said Dr. Peter Marks, speaking at an event hosted by the Milken Institute in Washington, D.C., this week, ahead of Trump’s decision.
Kennedy has insisted that he is not “anti-vaccine” and has pledged not to ban vaccines under Trump. Instead, Kennedy has promised to “restore the transparency” around vaccine safety data and records that he accuses HHS officials of hiding.
Marks flatly rebuked Kennedy’s claims about the safety data.
“There’s no secret files. I mean, if they’re secret, I hold a security clearance. If they are secret from me then, they must be at some other level of classification,” he said.
Public health experts have objected to Kennedy’s long record of misleading statements questioning vaccine safety and worry he could upend decades’ worth of hard-fought wins in improving vaccination rates against deadly diseases.
The Center for Science in the Public Interest, a watchdog group that has often clashed with the FDA, likened the pick to “putting a Flat Earther at the head of NASA.”
Marks, a career civil servant who played a key role in launching the Trump administration’s Operation Warp Speed response to the COVID-19 pandemic in 2020, says he has “sat in the room” across from Kennedy when vaccines were discussed multiple times.
While he said he worries that spending time “re-litigating things that we know work” could undermine other important FDA efforts — and could be potentially deadly during a future pandemic if it further erodes confidence in vaccines — Marks also said that working with RFK Jr. could turn out to have a silver lining.
“Perhaps engaging in that dialogue, especially if it’s in a public venue, it may help. It may help bring some of the rest of the country along because sometimes as somebody is convinced, perhaps, maybe some of the rest of the country will be,” he said.
Marks rejected Kennedy’s claims that the FDA is filled with corrupt officials who need to be fired, stressing that the staff is dedicated to protecting Americans’ health. Marks said he hopes to keep his job under Trump and Kennedy, and to protect the team at his center.
“They do what they do to protect the American people. Not for any kind of nefarious purpose. And during the COVID pandemic, people worked 14 hours a day,” Marks said of the agency’s staff.
Kennedy has vowed to end what he calls the agency’s “war on public health,” warning workers who are “part of this corrupt system” to “pack your bags.”
He has also specifically pledged to fire all of the nutritional scientists at the FDA and other agencies on his first day, accusing them of being co-opted by corporate interests.
“I look forward to working with the more than 80,000 employees at HHS to free the agencies from the smothering cloud of corporate capture so they can pursue their mission to make Americans once again the healthiest people on Earth,” Kennedy posted Thursday on X.
Asked about Kennedy’s scientific expertise, Marks said he thought Kennedy’s understanding is “not as deep as others,” but added, “I know a number of attorneys who know more than most PhDs and MDs about medicine. So it’s not the degree. It’s just a matter of keeping an open mind.”
While Kennedy’s pick for the role was just announced on Thursday, health officials have been bracing for the possibility for a while. During the campaign, Trump vowed he’d let Kennedy to “go wild” on health if he won.
“President Trump wants to see, has told me, he wants to see concrete, measurable diminishment in chronic disease within two years,” Kennedy said on Nov. 9.
Kennedy says he has called on Trump to declare an emergency to counter chronic disease, supercharging his authority to address what he sees as the root causes of the federal government’s failure to address rising rates of a range of ailments from autism to obesity.
“In order to do that, we need to operate very, very quickly. And we need to treat this with the same kind of urgency that we did, the COVID epidemic. This is a thousand times worse than COVID,” Kennedy said.
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