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Why you should open a 3-month CD today
Rates have increased significantly over the last few years due to the Federal Reserve attempting to temper inflation. The trend started in March 2022, when high post-pandemic inflation levels led the Fed to increase its target federal funds rate. And, the Fed then opted to increase its benchmark rate several more times before pausing rate hikes temporarily.
And, in general, that strategy appears to be working — at least somewhat. The inflation rate is cooling, but it hasn’t quite reached the Federal Reserve’s 2% goal. According to recent data, the inflation rate is now 3.1%.
Nonetheless, as inflation moves in the right direction, the Federal Reserve has decided to keep rate hikes paused over the last few months, leaving the benchmark interest rate at a 23-year high. And, you may be able to use today’s high interest rates to your advantage with the help of a 3-month certificate of deposit (CD) — which gives you an effective way to earn high returns on your savings.
Get more out of your savings with a 3-month CD today.
Why you should open a 3-month CD today
A 3-month CD allows you to take advantage of today’s high rates without having to lock your money up for more than a few months. Here’s why this type of CD makes sense now:
Rates are currently high on 3-month CDs
One good reason to open a 3-month CD right now is that APYs are high on the best accounts. Some of the best 3-month CDs are available at Popular Direct (5.00% APY) and Alliant Credit Union (4.25% APY). Both of these options have rates that outpace inflation, so you can use them to offset the losses from inflation and earn a positive return.
Tap into today’s high rates with a 3-month CD now.
Rates are expected to drop in the future
At 3.1%, the current inflation rate is still above the Federal Reserve’s 2% target. However, it’s significantly lower than the 9.1% inflation rate from June 2022, which suggests that the Fed’s efforts to hamper inflation are working.
If inflation continues to cool, the Fed will likely reduce its target federal funds rate soon. In fact, many experts expect the Federal Reserve to start rate cuts in June.
And, if you were to open a 3-month CD today, it would mature in late May. At that point, you could reassess the inflationary environment and decide whether it makes sense to lock in a higher rate for a longer term.
CD accounts are generally safe
“CDs, or certificates of deposit, are typically a safe way to increase your savings rate of return especially if you are averse to investing in stocks or bonds,” says Yosh Miller, CEO and founder of Hadley, a savings app.
CDs provide safety in two ways.
“When you open a certificate of deposit, you essentially deposit money with a bank that will give you a rate of return for an agreed upon term,” says Miller.
CDs typically come with FDIC or NCUA insurance, too, which protects you from losses of up to $250,000 per account in the event your financial institution becomes insolvent or goes out of business.
CDs can promote savings discipline
A 3-month CD may also be an effective tool to help you achieve your short-term savings goals. For example, if you want to take a vacation in three months, you could deposit the money you’re using to cover the expense in a 3-month CD. When you do, you’ll agree to keep your money in the account for the entire term.
If you tap into your CD early, you may have to pay an early withdrawal penalty. That could make it less appealing to tap into your funds early and increase the likelihood of meeting your savings goals.
The bottom line
Inflation is still above the Federal Reserve’s target and returns on leading deposit accounts are still competitive. It may be wise to open a 3-month CD to take advantage of today’s rate environment ahead of any potential rate changes in June.
CBS News
Biden’s top hostage envoy Roger Carstens in Syria to ask for help in finding Austin Tice
Roger Carstens, the Biden administration’s top official for freeing Americans held overseas, on Friday arrived in Damascus, Syria, for a high-risk mission: making the first known face-to-face contact with the caretaker government and asking for help finding missing American journalist Austin Tice.
Tice was kidnapped in Syria 12 years ago during the civil war and brutal reign of now-deposed Syrian dictator Bashar al-Assad. For years, U.S. officials have said they do not know with certainty whether Tice is still alive, where he is being held or by whom.
The State Department’s top diplomat for the Middle East, Barbara Leaf, assistant secretary of state for Near Eastern Affairs, accompanied Carstens to Damascus as a gesture of broader outreach to Hay’at Tahrir al-Sham, known as HTS, the rebel group that recently overthrew Assad’s regime and is emerging as a leading power.
Near East Senior Adviser Daniel Rubinstein was also with the delegation. They are the first American diplomats to visit Damascus in over a decade, according to a State Department spokesperson.
They plan to meet with HTS representatives to discuss transition principles endorsed by the U.S. and regional partners in Aqaba, Jordan, the spokesperson said. Secretary of State Antony Blinken traveled to Aqaba last week to meet with Middle East leaders and discuss the situation in Syria.
While finding and freeing Tice and other American citizens who disappeared under the Assad regime is the ultimate goal, U.S. officials are downplaying expectations of a breakthrough on this trip. Multiple sources told CBS News that Carstens and Leaf’s intent is to convey U.S. interests to senior HTS leaders, and learn anything they can about Tice.
Rubinstein will lead the U.S. diplomacy in Syria, engaging directly with the Syrian people and key parties in Syria, the State Department spokesperson added.
Diplomatic outreach to HTS comes in a volatile, war-torn region at an uncertain moment. Two sources even compared the potential danger to the expeditionary diplomacy practiced by the late U.S. Ambassador Christopher Stevens, who led outreach to rebels in Benghazi, Libya, in 2012 and was killed in a terrorist attack on a U.S. diplomatic compound and intelligence post.
U.S. special operations forces known as JSOC provided security for the delegation as they traveled by vehicle across the Jordanian border and on the road to Damascus. The convoy was given assurances by HTS that it would be granted safe passage while in Syria, but there remains a threat of attacks by other terrorist groups, including ISIS.
CBS News withheld publication of this story for security concerns at the State Department’s request.
Sending high-level American diplomats to Damascus represents a significant step in reopening U.S.-Syria relations following the fall of the Assad regime less than two weeks ago. Operations at the U.S. embassy in Damascus have been suspended since 2012, shortly after the Assad regime brutally repressed an uprising that became a 14-year civil war and spawned 13 million Syrians to flee the country in one of the largest humanitarian disasters in the world.
The U.S. formally designated HTS, which had ties to al Qaeda, as a foreign terrorist organization in 2018. Its leader, Mohammed al Jolani, was designated as a terrorist by the US in 2013 and prior to that served time in a US prison in Iraq.
Since toppling Assad, HTS has publicly signaled interest in a new more moderate trajectory. Al Jolani even shed his nom de guerre and now uses his legal name, Ahmed al-Sharaa.
U.S. sanctions on HTS linked to those terrorist designations complicate outreach somewhat, but they haven’t prevented American officials from making direct contact with HTS at the direction of President Biden. Blinken recently confirmed that U.S. officials were in touch with HTS representatives prior to Carstens and Leaf’s visit.
“We’ve heard positive statements coming from Mr. Jolani, the leader of HTS,” Blinken told Bloomberg News on Thursday. “But what everyone is focused on is what’s actually happening on the ground, what are they doing? Are they working to build a transition in Syria that brings everyone in?”
In that same interview, Blinken also seemed to dangle the possibility that the U.S. could help lift sanctions on HTS and its leader imposed by the United Nations, if HTS builds what he called an inclusive nonsectarian government and eventually holds elections. The Biden administration is not expected to lift the U.S. terrorist designation before the end of the president’s term on January 20th.
Pentagon spokesperson Pat Ryder disclosed Thursday that the U.S. currently has approximately 2,000 US troops inside of Syria as part of the mission to defeat ISIS, a far higher number than the 900 troops the Biden administration had previously acknowledged. There are at least five U.S. military bases in the north and south of the country.
The Biden administration is concerned that thousands of ISIS prisoners held at a camp known as al-Hol could be freed. It is currently guarded by the Syrian Democratic forces, Kurdish allies of the U.S. who are wary of the newly-powerful HTS. The situation on the ground is rapidly changing since Russia and Iran withdrew military support from the Assad regime, which has reset the balance of power. Turkey, which has been a sometimes problematic U.S. ally, has been a conduit to HTS and is emerging as a power broker.
A high-risk mission like this is unusual for the typically risk averse Biden administration, which has exercised consistently restrained diplomacy. Blinken approved Carstens and Leaf’s trip and relevant congressional leaders were briefed on it days ago.
“I think it’s important to have direct communication, it’s important to speak as clearly as possible, to listen, to make sure that we understand as best we can where they’re going and where they want to go,” Blinken said Thursday.
At a news conference in Moscow Thursday, Russian President Vladimir Putin said he had not yet met with Assad, who fled to Russia when his regime fell earlier this month. Putin added that he would ask Assad about Austin Tice when they do meet.
Tice, a Marine Corps veteran, worked for multiple news organizations including CBS News.
CBS News
12/19: CBS Evening News – CBS News
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Delivering Tomorrow: talabat’s Evolution in the Middle East
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