CBS News
Why you should open a CD before the November Fed meeting
Getty Images/iStockphoto
When it comes to the right financial product or service, timing is everything. And, for much of the last two years, the timing was right to open a certificate of deposit (CD) account. Whether you chose a short-term CD or a long-term CD and opted to deposit $500 or $5,000, you were able to earn a return exponentially higher than you could have just a few years earlier thanks to inflation and higher interest rates.
But the timing surrounding a CD account opening is changing again — and savers would be well-served by making some smart moves now while they still can.
For those who don’t yet have a CD account as well as those who still want to capitalize on today’s high rates, it makes sense to open a CD now, in the weeks before the Federal Reserve’s scheduled November meeting. Below, we’ll explain why.
See how much more you could be earning on your money with a top CD here.
Why you should open a CD before the November Fed meeting
Not sure if now is the right time to open a CD? Then consider these three factors:
Interest rates are still high
Despite the Federal Reserve’s September interest rate cut of half a percentage point, interest rates on CDs are still high at the moment, with many lenders offering rates in the 4% to 5% range. In other words, the interest rate climate has only recently started to cool and not so dramatically as to render CD rates unworthy.
That said, today’s rates are unlikely to stay this elevated for much longer, and many may wind up looking back on October 2024 as the last time they could’ve secured a high rate during this particular economic cycle. So don’t wait for that to happen.
Get started with a high rate CD here now.
Rates could fall in anticipation of a cut
A formal rate cut will ensure that lenders lower rates on their products, both for savers and for borrowers. But that cut doesn’t need to be official for lenders to preemptively get ahead of any reductions. Rates could fall in anticipation of a cut, as they did in September for mortgage rates, before the Fed took formal action. This same dynamic could play out with CDs in the final weeks of October. Start shopping around for rates and lenders now, then, before this theoretical scenario becomes a reality.
Multiple rate cuts now look likely
It’s been difficult to predict rate cuts this year, as many started 2024 expecting them to be issued in the spring or maybe in June. But with the first formal cut finally being issued on September 18 — the first in four years — the economy has had a chance to react. And while cuts in November and December now look likely to be just 25 basis points, that will add up to a full point reduction from where the federal funds rate was on September 1. That will reduce what you can earn on a CD if you wait to act past November. So, if you know how much you can comfortably deposit without risking an early withdrawal penalty, it makes sense to take action now, while high rate CDs are still easy to find.
The bottom line
While you could’ve opened a high-earning CD in much of 2022 and 2023, the window of opportunity hasn’t fully closed just yet. By acting now, savers can still lock in a rate between 4% and 5% — and they can do both before the Fed issues an additional rate cut in November and before lenders start pricing in that reduction into their offers. Just be sure to shop around to find a lender offering the best rates and terms and consider using an online bank, as they can generally (but not always) offer a more attractive return than banks with physical branches.
Getty Images
In the third quarter of 2023, U.S. mortgage holders collectively held $17.2 trillion in home equity, according to the November 2024 ICE Mortgage Monitor report. This includes $11.2 million in “tappable” equity, or equity homeowners can borrow against without dropping below an 80% loan-to-value ratio.
For homeowners, this translates to an average of $319,000 in total equity and $207,000 in tappable equity. Rising home prices provided this big pot of accessible cash and, for some, using it to upgrade their space could increase home values further — especially now that home equity loan and home equity line of credit (HELOC) rates have dropped steadily since their post-pandemic peak and are expected to fall further in the coming months.
Taking out a home equity loan or a HELOC to fund improvements allows you to borrow at an affordable rate, and both HELOC interest and home equity loan interest may be tax-deductible if funds are used to improve a qualifying primary or second home. If you’re thinking about using some of your equity to improve your living quarters, though, there are some home improvement projects in particular that experts say could boost your home’s value.
Compare today’s top home equity borrowing options online now.
3 strategic home projects that can boost your home’s value in 2025
The following home projects could pay off by boosting the value of your home in the new year:
1. Build an accessory dwelling unit
If you’re hoping your home could bring in some extra cash, or if you want to make room for extended family and household help, adding an accessory dwelling unit could be the ideal upgrade for you.
Andrea Saturno-Sanajna, a broker with Coldwell Banker Warburg, says that many localities are enacting legislation or creating programs to encourage the building of ADUs to create more affordable housing. In some cases, these programs even come with government funding to help cover the costs. However, even without this bonus, Saturno-Sanajna believes this is a project worth thinking about if it’s allowed in your area.
“The ADU could be rented out for additional income or used for aging parents or college students to be near family while maintaining some autonomy, for au pairs, exchange students or carers, or even for income-generating, short-term holiday accommodation where permitted,” Saturno-Sanajna says.
MyHome by Freddie Mac reports that ADUs increase your home’s value by as much as 35%, but they must fulfill certain requirements including having a kitchen, bathroom, and separate entrance. If you have the space and the equity available to create this type of dwelling, the payoff could be substantial.
Learn what your best home equity borrowing rates could be today.
2. Increase your energy efficiency
With the growing threat of climate change and the rising cost of electricity, projects that improve your home’s energy efficiency should be top on your list in 2025, says Michael C. Weiner, an agent at Coldwell Banker Warburg.
“Infrastructure changes that improve energy efficiency aren’t just helpful in boosting value but also can start paying for themselves from day one,” Weiner says.
His suggestions included upgrading your windows, adding insulation or installing a smart thermostat.
Weiner also recommends switching out older appliances with newer, more energy-efficient ones that can both give your home an updated look and reduce your utility bills for a double payoff. With the Department of Energy reporting that a new Energy-Star-certified fridge could save you more than $220 during its 12-year lifetime, this upgrade alone could be worth making.
3. Invest in wellness
The COVID-19 pandemic brought a renewed focus on maintaining good health, so incorporating wellness features in your home could be an upgrade worth considering in 2025.
Broker Sean Adu-Gymafi of Coldwell Banker Warburg advises installing upgrades like whole-house water filtration systems and air purification systems throughout the home.
“Water filtration systems will provide better water quality and are better for the environment as they can reduce the amount of bottled water used,” Adu-Gymafi says. “Similarly, installing air purification systems throughout the home can also add value. As more people prioritize health and their well-being, these features are becoming very desirable.”
The bottom line
These upgrades could help you to improve your financial situation immediately as you bring in rental income, improve your health and lower your monthly bills. They may also make your property more desirable to future buyers. Tapping into equity to complete them could be a smart financial choice in the new year, especially if you shop around for loans at competitive rates and take advantage of new, more affordable borrowing opportunities.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.