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Why you should open a CD with your tax refund

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Depositing your tax refund into a CD could have a meaningful impact on your finances. 

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Tax season is upon us and many Americans are awaiting a refund. While it can be easy to spend that money on unnecessary purchases, it can be smart to use your tax refund to put yourself on better financial footing. 

After all, if invested properly, the money you receive from your tax return could grow more meaningful over time. And, one compelling way to get more out of your refund is to put it into a certificate of deposit (CD)

Open a CD today to lock in today’s high returns

Why you should open a CD with your tax refund

If you have a tax refund coming your way, it may benefit you to use the money to help you achieve your financial goals. Here are a few reasons a CD may be a great place to deposit the money from your refund: 

CDs offer the potential for excellent returns

The Federal Reserve began increasing interest rates in March 2022 in response to high inflation levels. The Fed then raised its benchmark rate several times thereafter, pushing the federal funds rate to a 23-year high, where it sits today.

That’s important because interest rates for lending and deposit accounts are impacted by changes made to the federal funds rate. And, because that rate was hiked numerous times, many of today’s CDs offer impressive returns. For example, many 1-year CDs come with APYs over 5%.

Compare CD accounts now to find the right option for your needs

High rates won’t last forever

“This is a nice time to give some serious consideration to a CD if you are a risk-averse investor,” says Matt Willer, managing director and partner at Phoenix Capital Group. “Rates appear to be heading down toward the end of 2024, so locking in a reasonable rate prior to that is advantageous.” 

The idea that rates could drop can make CDs even more attractive, as you lock in the rate for the full CD term when you open the account. So, you can use a CD to lock in today’s impressive rates — protecting you from future rate decreases that occur during the CD term. 

CDs are a safe place to store your cash

CDs are safe savings vehicles for two reasons. First, these accounts are typically FDIC- or NCUA-insured up to $250,000 per depositor, per account. So, if your financial institution becomes insolvent, this insurance covers the money you have deposited in your CD. And CDs also come with fixed interest rates. So, you’ll know exactly how much money you’ll earn when you open your account. 

CDs can act as a safe-haven asset

In today’s high-rate environment, using your tax return to open a CD could help diversify your investment portfolio with a safe-haven asset. 

“The markets have been on a straight path to new highs,” says Willer. “It might be a nice time to take some volatility off as we get closer to the elections and navigate through domestic and international uncertainty.”

CDs could help you achieve your savings goals

Finally, a CD may help you achieve your savings goals. That’s because, when you open your CD, you typically agree to keep your money in the account for the full term. If you decide to access your money early, you generally pay a penalty to do so. 

And, if you’re required to pay a penalty to access your money, you’ll be less likely to tap into it before your account matures. As such, a CD can help you achieve your savings goals. 

The best part is that CDs come in various terms. So, you should be able to find options to help you achieve your goals, whether they’re short-, mid- or long-term. 

The bottom line

The average tax refund for the week of February 16 was over $3,200, according to the IRS. And while the idea of spending that cash may seem appealing, investing it into a CD could have a meaningful impact on your long-term financial stability. 



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U.S. received Iran’s written assurance it was not actively trying to assassinate Trump

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The U.S. received written assurance from Iran before the presidential election that its leadership was not actively trying to assassinate President-elect Donald Trump, CBS News confirmed, according to a source with direct knowledge of the correspondence. The message arrived after the White House in September affirmed that killing a former U.S. president or former U.S. official would be seen by the Biden administration as an act of war. 

“We consider this a national and homeland security matter of the highest priority, and we strongly condemn Iran for these brazen threats,” National Security Council spokesman Sean Savett said in a statement in September.

Iran said in its message, which was conveyed by a third party, that it understood this premise. The Wall Street Journal first reported Iran’s message to the U.S. 

The Justice Department is currently prosecuting at least two individuals alleged to have been part of murder-for-hire plots to kill Trump while he was still a candidate. One operative working for Iran’s Islamic Revolutionary Guard Corps told federal investigators that he was tasked in September with “surveilling, and, ultimately, assassinating” Trump, according to court records unsealed last week. 

Prosecutors said Farhad Shakeri, who is believed to be residing in Iran, told investigators in a phone interview that unnamed IRGC officials pushed him to plan an attack against Trump to take place in October. If the plan could not come together in time, the Iranian officials directed Shakeri to delay the plot until after the election because the official “assessed that [Trump] would lose the election,” the charging documents said. 

In early August, a Pakistani national with alleged ties to Iran was arrested and charged with plotting a murder-for-hire scheme targeting U.S. government officials and politicians, according to charging documents unsealed Tuesday.

A U.S. official pointed out that Iran did not task its most effective proxy force, Hezbollah, with carrying out these plots. This official described Iran’s approach to date as “nice if it works. If it doesn’t, then it’s not a problem.” 

In response to inquiries suggesting that “Iran told U.S. it wouldn’t try to kill Trump”, the Permanent Mission of the Islamic Republic of Iran said it would not comment on official messages between two countries. 

The mission said in a statement, “The Islamic Republic of Iran has long declared its commitment to pursuing Martyr Soleimani’s assassination through legal and judicial avenues, while adhering fully to the recognized principles of international law.”

Trump has raised the ire of Iranians for a few reasons. He exited the international Iran nuclear agreement, which had lifted some sanctions in exchange for restrictions on Iran’s nuclear program. He also directed the 2020 airstrike that killed top Iranian commander Gen. Qasem Soleimani. Since then, some Trump administration officials and military officials received threats from the regime, among them, Robert O’Brien, who was national security adviser during the strike. His predecessor in the job, John Bolton, who was part of the maximum pressure campaign that exerted sanctions pressure on Tehran, has also received threats. 

In 2022, the U.S. intelligence community assessed that Iran would threaten Americans — both directly and via proxy attacks — and was committed to developing networks inside the U.S. Two persistent threat assessments submitted to Congress by the State Department in January 2022 cited a “serious and credible threat” to the lives of former Secretary of State Mike Pompeo and former Trump administration Iran envoy Brian Hook. The non-public assessments showed that throughout 2021 and again in 2022, the State Department determined that round-the-clock, U.S.-taxpayer-funded diplomatic security details were needed to protect both men. That continues today.

Multiple former officials have spoken to CBS about duty-to-warn notices that they have recently received from the FBI and other agencies regarding the ongoing threat from Iran and Iranian-hired actors, implying the U.S. is taking the threat seriously and not taking the Iranian regime’s assurances at face value.

contributed to this report.



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National security implications of Trump’s Cabinet picks

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National security implications of Trump’s Cabinet picks – CBS News


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President-elect Donald Trump’s picks for key Cabinet roles have raised some eyebrows in Washington, D.C. While Trump is elevating some of his most passionate supporters for key roles in his administration, it’ll take much more than strong rhetoric to lead the nation’s most powerful federal agencies. CBS News national security contributor Sam Vinograd joins to discuss.

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Doctor explains how RFK Jr.’s plans could affect Americans’ health

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Doctor explains how RFK Jr.’s plans could affect Americans’ health – CBS News


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President-elect Donald Trump has followed through with his campaign promise to pick Robert F. Kennedy Jr. to lead the Department of Health and Human Services. He is known for falsely claiming that vaccines cause autism and other health issues. CBS News medical contributor Dr. Celine Gounder discusses the implications of the move.

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