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Why you should open a CD with an online bank now
Savers who have been accustomed to earning high rates on their money for very little effort may soon need to change their approach. After all, in recent years, inflation was elevated and interest rates were high in an attempt to tame it. But inflation has dropped significantly in recent months, plummeting to its lowest point in three years. The Federal Reserve has responded accordingly, cutting its federal funds rate for the first time since 2020. Additional reductions appear likely, too, for when the Fed meets again in November and December.
Against this backdrop, then, savers may want to make some strategic moves now, while rates are still relatively high and accessible. One of the best ways to take advantage is by opening a certificate of deposit (CD) account with an online bank. Below, we’ll explain why you should do so now.
See how much more you could be earning on your money with a top CD here.
Why you should open a CD with an online bank now
In the face of looming interest rate cuts and with the reality of one already issued this year, savers will want to lock in a high rate right now while they still can. While high-yield savings accounts offer this opportunity, the rates on these accounts are variable and likely to drop as the federal funds rate does (even if not in direct proportion).
CD accounts, however, have locked rates that will remain the same for the full CD term despite any rate cooling in the larger economy. That’s a major advantage for savers, particularly considering that CD terms can last multiple years. It’s not hard to find an account with a term of three years or longer with a rate in the 4% to 5% range today. But, in general, you’ll need to open a CD with an online bank to get it.
Why an online bank and not a lender with physical branch locations? While not a uniform rule, online banks tend to offer higher interest rates than those banks that have the expenses of maintaining physical branches. Because online banks don’t have to pay for items like rent, maintenance and staffing a brick-and-mortar location, they’re able to save more money – and pass those savings on to customers in the form of higher interest rates.
CDs are one of the avenues in which they can do that. It’s not always the case and, in some instances, you may be able to find a higher rate with a local bank branch in your neighborhood. But, in general, if you want to lock in a CD with the highest rate possible – as you’ll want to do now with additional rate cuts looming – an online bank is the best way to do so.
Get started with a high-rate CD online today.
What about regular savings accounts?
Searching around for a CD account online is easy but, for some, it may be more tempting to simply leave their money in a regular savings account instead. But that would be a mistake. For starters, the average interest rate on a traditional savings account today is just 0.46%. You can easily find a CD with a rate of 4% online now, making the latter 769% better than the former. Plus, savings accounts come with variable rates that can and will change as rate cuts are issued. In other words, that minimal 0.46% return is likely to drop even further and further as rates decline. When compared to this realistic scenario, then, a CD opened with an online bank becomes the clear best option.
The bottom line
If you haven’t yet opened a CD online or want to open another one, now is the right time to act, before interest rate cuts reduce what you can earn with these reliable savings vehicles. Online banks, in general, offer better rates and terms than banks with physical branches. No matter which option you choose, though, you’ll likely do better than you can by leaving your funds untouched in a regular savings account. But the timing here is key. With the Fed set to meet two additional times this year, this current cycle of high CD rates could soon be coming to an end. So don’t let the opportunity slip by.
Explore your best CD options online today.
CBS News
U.S. mulls ban on Chinese-made TP-Link routers over security concerns
The U.S. is considering banning the sale of TP-Link internet routers, which are made in China, over concerns the home devices pose a security risk, the Wall Street Journal reported.
Authorities may ban the popular routers, which were linked to Chinese cyberattacks, as early as next year when President-elect Donald Trump takes office, according to the report.
Trump has signaled that he is prepared to take a tough stance on China in his second term in office, including by introducing levies of as much as 60% on Chinese-made goods.
TP-Link says its routers do not account for a majority of the internet router devices in U.S. homes and small businesses. The routers are available for purchase on Amazon.com, where they are a best-seller. Amazon did not immediately respond to CBS MoneyWatch’s request for comment on the potential ban.
The company’s connectivity products are used by the U.S. Defense Department and other federal government agencies, too, according to the WSJ.
For its part, TP-Link told CBS MoneyWatch that the company’s “security practices are fully in line with industry security standards in the U.S.”
“We implement rigorous secure product development and testing processes, and take timely and appropriate action to mitigate known vulnerabilities,” a TP-Link spokesperson said in a statement to CBS MoneyWatch.
Many consumer brands targeted by Chinese hackers
The company added that many consumer electronics brands are targeted by China-based hacking groups and that it welcomes “opportunities to engage with the federal government to demonstrate that our security practices are fully in line with industry security standards, and to demonstrate our ongoing commitment to the American market, American consumers and addressing U.S. national security risks.”
The Justice Department is investigating whether the routers’ relatively low price violates a law stipulating that companies can’t sell goods for less than the cost of production, the WSJ reported, citing a person familiar with the matter. On Amazon.com, a handful of router models by T-Link are available for sale with a base model costing around $99. The routers are available for sale through a business unit in California as well.
In a statement to CBS MoneyWatch, TP-Link said that while it does undercut competitor prices, it does not sell any products below cost.
Compromised routers
In October, Microsoft published an analysis which found that a Chinese hacking entity had access to a trove of compromised TP-Link routers.
“CovertNetwork-1658 specifically refers to a collection of egress IPs that may be used by one or more Chinese threat actors and is wholly comprised of compromised devices. Microsoft assesses that a threat actor located in China established and maintains this network. The threat actor exploits a vulnerability in the routers to gain remote code execution capability,” the report explains.
TP-Link said that it takes “appropriate action to mitigate any vulnerabilities” the company becomes aware of. It has also signed the U.S. Cybersecurity and Infrastructure Security Agency, or CISA, Secure-by-Design pledge.
CBS News
“Murder hornets” eradicated in the U.S., agriculture officials say
The Northern giant hornet, more commonly known as the “murder hornet,” has been eradicated in the U.S., agriculture officials said Wednesday.
The ominously nicknamed invasive species was confirmed to be in the U.S. in 2019 after officials in Washington state received and verified two reports of the hornet. Efforts quickly began to track and get rid of them.
The 2-inch-long hornet, with a stinger longer than that of a typical wasp, can deliver potent venom, but is largely dangerous to bees and other insects, not humans. Eradication efforts started because of the threat the hornet posed to bees and agriculture across the country.
“By tackling this threat head-on, we protected not only pollinators and crops, but also the industries, communities, and ecosystems that depend on them,” Dr. Mark Davidson, deputy administrator at USDA’s Animal and Plant Health Inspection Service, said in a news statement.
How “murder hornets” were eradicated
State, federal and international government agencies worked together to eradicate “murder hornets” in the U.S., the officials said.
To do so, first entomologists had to find the hornets’ nests. Finding the nests can be a challenge, because the hornets typically build their nests in forested areas, often in an underground cavity, according to the U.S. Department of Agriculture. In some cases, entomologists captured a live hornet, attached a radio tag to it, released it, and tracked the hornet back to its nest. Figuring out how to securely attach a radio tag to a hornet without harming it was a hurdle.
After finding a nest in a tree, a team plugged the nest with foam, wrapped the tree in plastic and vacuumed out the hornets. They also injected carbon dioxide into the tree to kill any remaining hornets.
In 2022, scientists said they were setting about 1,000 hornet traps in Washington. Hornets caught in traps help scientists find the location of nests. The previous year, Washington state officials destroyed a nest, finding nearly 1,500 hornets “in various stages of development.”
The public also helped officials track down hornet nests. If not for help from the public, there’s a good chance that the hornet could have been around for years to come, Sven Spichiger, Washington State Department of Agriculture pest program manager, said during a news conference Wednesday.
“All of our nest detections resulted directly or indirectly from public reports,” Spichiger said in a press release. “And half of our confirmed detections came from the public.
Could the hornet come back to the U.S.?
While officials in Washington celebrated the eradication of the invasive hornet species, Spichiger acknowledged they could come back to the U.S. He said officials would continue to keep an eye out for the hornet and encouraged members of the community to do the same.
“They got here once and they could do it again,” Spichiger said.
CBS News previously reported that it was unclear how the hornets first arrived in the U.S., though invasive species can be “unwitting hitchhikers” on things like shipping containers.
Even now, five years after the hornets appeared in the U.S., Spichiger said officials will never know exactly how they got to the country.
What makes “murder hornets” unique?
The hornet, an invasive species from Asia, can kill an entire hive of honeybees in as little as 90 minutes, according to agriculture officials.
“The hornets can enter a ‘slaughter phase‘ where they kill entire hives by decapitating the bees. The hornets then defend the hive as their own, taking the brood to feed their own young,” according to the Washington State Department of Agriculture. “They also attack other insects but are not known to destroy entire colonies of those insects.”
The hornets typically only attack people or pets when threatened, but can sting repeatedly.
The hornet species has a large orange or yellow head and black-and-orange stripes across its body.
They were first detected in North America in British Columbia, Canada ,in August 2019, authorities said, and then were confirmed in Washington state by the end of 2019.
While the U.S. appears to have gotten rid of them, at least for now, scientists in Spain last month reported sightings of the hornet species in Europe. They described two sightings of the hornet in the journal Ecology and Evolution.
CBS News
Jerome Powell on U.S. economy after Federal Reserve interest rate cut decision
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