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What will happen to short-term CD rates in 2024?
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The Fed’s recent 11-hike cycle left the federal funds rate at an elevated rate of 5.33%. While there hasn’t been an increase since July 2023 thanks to cooling inflation, the current rate is still higher than it’s been since 2001.
As a result, many Americans are anxiously awaiting rate decreases so their borrowing costs will go down. Others, however, have been taking advantage of the higher rates through interest-yielding savings and certificate of deposit (CD) accounts.
If you’ve been investing in CDs, you may have noticed the general shape of the yield curve has inverted, meaning shorter-term CDs have higher rates than longer-term ones. Below, we’ll break down why experts say this is happening and how it may change in 2024.
If you’re considering a CD then start by exploring your rate options to determine how much more you could be earning.
What will happen to short-term CD rates in 2024?
Under normal circumstances, the longer you agree to leave funds in a CD account, the more interest you can earn.
“Historically, long-term CDs typically offered higher interest rates, reflecting the commitment required from depositors to keep their funds locked in for an extended period,” says David Donovan, the executive vice president and head of financial services at Publicis Sapient.
So why are shorter-term CDs paying higher rates than longer-term CDs right now?
“Over the past two years, short-term CDs have seen higher rates primarily due to the economic uncertainty and the Federal Reserve’s response to inflation,” says Taylor Kovar, CFP, the founder and chief executive officer at Kovar Wealth Management.
“In uncertain times, banks are hesitant to lock in long-term rates, leading to higher rates for short-term CDs as a way to attract depositors without committing to long-term payouts,” Kovar says.
See what short-term CD rate you could secure here.
Now that interest rates are expected to decrease, what will happen to short-term CD rates in 2024? Kovar says it’s going to depend on several factors.
“The traditional model where long-term CDs offer higher rates than short-term ones could return as economic stability is restored,” says Kovar. “This shift would likely occur once inflation is under control and the market adjusts to a new normal.”
However, he explained that the timing of this shift is uncertain and will depend on a range of factors including economic growth, inflation trends and monetary policy decisions.
“If the Fed continues to raise rates to combat inflation, we might see short-term CD rates remain elevated in 2024. However, if inflation begins to cool down, there could be a stabilization or even a decrease in these rates,” Kovar says.
Should you open a CD now?
Opening a CD now can be advantageous because it’ll allow you to lock in an elevated interest rate before rates drop. As long as you open the account and secure the rate, you’ll be able to keep it throughout the full term of your CD contract.
“Over the last year, short-term CD rates have been very competitive due to the interest rate hikes. It’s still a great time to purchase a short-term CD while rates are highly competitive,” says Jordan Mangaliman, the chief executive officer of Goldline Financial Services. “If you see a rate you like today, take it.”
Get started with a top-earning CD here today!
CBS News
Kamala Harris will speak with “60 Minutes” tomorrow. Here’s what to know for the interview.
Voters will get the chance to hear from Vice President Kamala Harris on Monday as she presents her case for why she should be president in a “60 Minutes” election special.
For decades, “60 Minutes” has featured both Republican and Democratic nominees for presidents, but this year, former President Donald Trump backed out after previously indicating he would be on the show. Correspondent Scott Pelley, who’d been set to interview Trump, will instead travel to Arizona’s Maricopa County, home to more than 60% of Arizona’s voters and a critical battleground in a key swing state.
One thing is certain about the election; with the U.S. deeply involved in both the wars in Ukraine and the Middle East, whoever wins on Nov. 5 will become a wartime president.
What Harris will discuss
Israel’s war started one year ago after Hamas launched a surprise terror attack and correspondent Bill Whitaker will discuss the ongoing war with Harris.
Harris will also discuss the economy, immigration, her record as vice president and the differences between herself and Trump.
Democratic vice presidential candidate Gov. Tim Walz will also appear.
Whitaker joined the Democratic ticket on the campaign trail this week to gain insight into their platform’s priorities and values, and what the candidates believe voters should know.
Why Trump pulled out of the “60 Minutes” interview
Leading up to the candidate hour, Trump, through campaign spokespeople, was the first candidate to accept the “60 Minutes” request to be interviewed for the special, according to CBS News. It had been agreed that both candidates would receive equal time during the broadcast.
Trump last sat down with 60 Minutes in 2020. He walked out during the interview with Lesley Stahl. Trump referenced the incident on Tuesday night at a Milwaukee press conference when asked about his decision not to participate in the Oct. 7 “60 Minutes” election special.
“Well, right now, I went to – they came to me and would like me to do an interview, but first I want to get an apology, because the last time I did an interview with them, if you remember, they challenged me on the computer,” Trump said. “They said the ‘laptop from hell’ was from Russia, and I said it wasn’t from Russia. It was from Hunter, and I never got an apology, so I’m sort of waiting. I’d love to do ’60 Minutes.’ I do everything.”
The Republican nominee for president emphasized that he felt he was owed an apology from “60 Minutes.”
“Let’s see if they do it. I wouldn’t mind doing 60,” Trump continued. “I’ve done ’60 Minutes’ a lot.”
In a statement on Tuesday, Trump campaign communications director Steven Cheung said that Trump’s team had not agreed to an interview.
“Fake News,” Cheung said in a post on X. “60 Minutes begged for an interview, even after they were caught lying about Hunter Biden’s laptop back in 2020. There were initial discussions, but nothing was ever scheduled or locked in. They also insisted on doing live fact checking, which is unprecedented.”
Previous Trump, Harris appearances on 60 Minutes
Trump previously sat down with “60 Minutes'” Mike Wallace in 1985, Pelley in 2015 and Lesley Stahl twice in 2016, first in July of that year and then again in November of 2016. He also spoke with Stahl again in 2018 and 2020.
Harris previously sat down with Whitaker last year. She also was interviewed by Norah O’Donnell, “CBS Evening News” anchor and “60 Minutes” contributing correspondent, in 2020.
How to watch the “60 Minutes” election special
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