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Should you open a long-term CD after your current account matures?
In the interest rate climate of 2022 through much of 2024, the reasons for opening a certificate of deposit (CD) account were clear. An elevated interest rate combined with a fixed structure allowed savers to earn exponentially more on their money than they would have just a few years earlier. And many savers did, turning to these accounts to protect and grow their funds in an inflationary environment. This led to some savers being able to earn thousands of dollars on their money.
For many, however, the maturity date of their current CD account is quickly approaching, possibly before the end of 2024. This leads to a series of questions about the next steps, mistakes to avoid and a pending decision about what other CD term may be worth opening after the current account matures. Right now, there’s a strong argument to be made for opening a long-term CD next. Below, we’ll explain why.
See how much you could be earning with today’s long-term CD rates here.
Should you open a long-term CD after your current account matures?
Each saver’s financial situation is different and, for some, the next step may be moving their funds into a high-yield savings account or a short-term CD after their current CD matures. For others, however, it can be worth opening a long-term CD instead. Here’s why:
Long-term protection: Long-term CD terms can last anywhere from 18 months to 10 years. That will offer significant, long-term protection for your money. That protection is particularly important to have now heading into 2025. Inflation just rose in October, interest rate cut predictions are uneven and other economic factors could all affect your investments and savings. Adding a layer of protection with a locked CD rate for the foreseeable future, then, makes sense for many.
Get started with a long-term CD here.
Predictable returns: Sure, high-yield savings account interest rates are a bit higher than long-term CDs right now (think 4.25% for a 2-year CD versus 4.85% for a high-yield account). But that high-yield savings account rate is variable and likely to change multiple times throughout those two years, making it impossible to predict your returns. And if rates continue to fall, so will the interest-earning capability of the account. Long-term CD interest, however, can be calculated with precision, which makes these accounts a key addition for savers otherwise subject to the volatility of the current rate climate.
Penalties discourage overspending: That elevated long-term CD interest rate won’t come without a personal investment on behalf of the saver. If you attempt to regain access to your funds before the maturity date, you’ll have to pay an early withdrawal penalty. And that can be steep on long-term accounts, as they often are calculated by how long the money has been accruing interest. Still, this isn’t necessarily a negative factor because penalties can discourage overspending, particularly during the holiday season and other times of the year when you tend to spend more than you should.
The bottom line
If your CD account is approaching it’s maturity date, or if you’re already in the CD grace period, then you’ll want to decide on what to do with the account funds relatively quickly. As the above reasons demonstrate, many savers may find it beneficial to move that money into a long-term CD now. Just be sure to pick the right CD term if you do in order to avoid paying any unnecessary early withdrawal penalties if you can’t keep the funds untouched for the full term.
Learn more about your current CD account options here.
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Jeff Daniels on bringing stories and skits to life in new season of “Alive and Well Enough” podcast
Emmy winner Jeff Daniels has launched season two of his audio memoir “Alive and Well Enough Continues,” featuring stories and music from his decades-long career. The podcast, available on Audible, blends stories, music, and skits, offering a unique perspective on Daniels’ journey.
In one clip, the star of “The Newsroom” and “Dumb and Dumber” detailed his 1991 Saturday Night Live hosting experience, where over-preparation met the show’s notorious last-minute rewrites.
“By Thursday night’s rehearsal, I had all 15 sketches memorized,” Daniels said. “If you have never hosted ‘Saturday Night Live’ and you are about to, don’t memorize all 15 sketches by Thursday night’s rehearsal. Cue the rewrites. Pages and pages of rewrites.”
Speaking on “CBS Mornings,” Daniels explained the intimate approach of his podcast.
“You’re aiming at one listener, and they are walking, they are treadmilling, they’re doing whatever they’re doing. You’re taking them away for 30 minutes,” he said,
The project, a collaboration with his son Ben as the engineer, allows Daniels to reflect on lessons learned.
“Let’s kind of find out this more about this life I lived and see on the way if I can’t talk about what I learned from Meryl Streep, what I learned from Mike Nichols, what I learned doing comedy with Jim Carrey … just share that with people, and especially younger actors,” he said.
The podcast isn’t just for fans—it’s also a way for Daniels to share more of himself with his family.
“I want them to know what I went through to get where I am this morning, and I want to know what I went through. As you start to writing, which is what I also love to do, I’ve never been an actor that sat around and waited for the phone to ring so I could be creative again. I was creative while waiting,” he said.
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Hegseth continuing push for defense secretary as Trump reportedly considers replacements
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