CBS News
CD interest rate forecast for summer 2024: Everything experts predict
Getty Images
Inflation remains relatively high at 3.4%, higher than the Federal Reserve’s target rate. To achieve its goal of lower inflation, the Fed opted to keep the federal funds paused at the same rate at last month’s meeting. As a result, interest rates for borrowing products, like auto loans and home loans, will remain high — at least until the Fed’s next meeting.
The continued rate pause was good news for savers, though, since high-yield savings and certificate of deposit (CD) rates will likely stay elevated for now. In fact, some of the best CD accounts have interest rates of over 5% currently. But that could change over time. So what exactly will happen with CD rates this summer?
Compare the top rates you could earn on the right CD account today.
What will happen to CD rates in the summer of 2024?
Here’s what some experts think might happen to CD rates this summer.
CD rates might remain flat
When the Federal Open Market Committee (FOMC) met earlier this month, the Federal Reserve voted to keep the federal funds rate the same. As a result of this decision, CD rates could remain flat this summer, some experts say.
“Short-term rates will likely stay flat or decline slightly if the FED cuts rates later this year,” says Noah Damsky, CFA, principal of Marina Wealth Advisor. “The opportunity for higher CD rates is the least probable outcome.”
Chris Diodato, CFA and CFP and founder at WELLth Financial Planning, also believes CD rates will stay the same this summer.
“Officials at the Federal Reserve have noted that progress on beating down inflation has stalled in 2024,” says Diodato. “Wage inflation is too high, and we’re starting to see inflation in raw materials like copper and aluminum.”
Because of those factors, Diodato expects rates to stay the same, at least through the third quarter of this year.
Find out how opening a CD could help you achieve your savings goals now.
CD rates might drop
Most of the experts we spoke with agree that CD rates will likely fall this summer, but that’s only if the Fed lowers rates.
“If the Fed lowers their benchmark federal funds rate (what they directly control), it could cause CD rates for just about every term under five years to fall,” says Diodato.
However, he believes it’s harder to predict the direction of CDs with terms over five years.
“Longer-term CDs are influenced by interest rate changes, but are also determined by factors, such as long-term inflation and economic growth expectations, which the Fed doesn’t directly control,” Diodato says.
“The Fed may lower rates in the fall,” says Angela Dorsey, a certified financial planner and founder at Dorsey Wealth Management. If that happens, Dorsey thinks CD rates will drop.
The benefits of opening a CD now
The main benefit of opening a CD now is that you can lock in a good CD interest rate for up to a year or longer.
“If someone is waiting for rates to increase to purchase a CD, they may miss out on today’s relatively high rates. I would encourage them to purchase now and lock in today’s rate by purchasing a 6-month or 12-month CD,” says Dorsey.
Brian Seymour, II, a certified financial planner, ChFC, and founder at Prosperitage Wealth, has similar thoughts.
“I would remind anyone looking at current CD rates of the below 1% rates we saw last decade,” says Seymour, “Locking in a guaranteed rate above 5% can provide investors with a return and peace of mind that may not be available much longer.”
The bottom line
Right now, CD rates are high — and some financial institutions offer rates as high as 5.30%. But before you open one, consider alternative banking products and the likelihood you’ll need to access the money before the term expires to avoid early withdrawal penalties.
“With the rates of CDs and high-yield savings accounts (HYSAs) so comparable, an HYSA should be considered as an alternative to locking your money away for extended periods of time,” says Seymour.
If you decide to get a CD, select a CD term that fits your financial situation. For instance, if you plan on paying your child’s first-year tuition in two years, consider getting a 2-year CD.
NEW YORK — The Teamsters union is launching a strike against Amazon at numerous locations across the country, including in Maspeth, Queens.
The Teamsters are calling it the largest strike against Amazon in United States history, and it’s set to begin at 6 a.m. Thursday. In addition to New York City, workers will be joining picket lines in Atlanta, Southern California, San Francisco and Illinois.
In a video announcement released Wednesday night, workers voiced their frustrations.
“Us being strike ready means we’re fed up, and Amazon is clearly ignoring us and we want to be heard,” one worker says in the video.
“It’s really exciting. We’re taking steps for ourselves to win better conditions, better benefits, better wages,” another worker in the video says.
The union says it represents about 10,000 Amazon employees and that Amazon ignored a deadline to come to the table and negotiate. The $2 trillion company doesn’t pay employees enough to make ends meet, the union asserts.
At the height of the holiday season, many are wondering what this means for packages currently in transit.
Teamsters President Sean O’Brien said, “If your package is delayed during the holidays, you can blame Amazon’s insatiable greed.”
Amazon says Teamsters are misleading the public
An Amazon spokesperson says the Teamsters are misleading the public and do not represent any Amazon employees, despite any claims.
“The truth is that the Teamsters have actively threatened, intimidated, and attempted to coerce Amazon employees and third-party drivers to join them, which is illegal and is the subject of multiple pending unfair labor practice charges against the union,” the spokesperson said in a statement.
An Amazon representative says the company doesn’t expect operations to be impacted.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
CBS News
Wisconsin school shooter was in contact with California man plotting his own attack, court documents say
The shooter who killed a student and teacher at a religious school in Wisconsin brought two guns to the school and was in contact with a man in California whom authorities say was planning to attack a government building, according to authorities and court documents that became public Wednesday.
Police were still investigating why the 15-year-old student at Abundant Life Christian School in Madison shot and killed a fellow student and teacher on Monday before shooting herself, Madison Police Chief Shon Barnes told the Associated Press Wednesday. Two other students who were shot remained in critical condition on Wednesday.
A Southern California judge issued a restraining order Tuesday under California’s gun red flag law against a 20-year-old Carlsbad man. The order requires the man to turn his guns and ammunition into police within 48 hours unless an officer asks for them sooner because he poses an immediate danger to himself and others.
Carlsbad is located just north of San Diego.
According to the order, the man told FBI agents that he had been messaging Natalie Rupnow, the Wisconsin shooter, about attacking a government building with a gun and explosives. The order doesn’t say what building he had targeted or when he planned to launch his attack. It also doesn’t detail his interactions with Rupnow except to state that the man was plotting a mass shooting with her.
CBS’ San Diego affiliate KFMB-TV reported that law enforcement searched the man’s home Tuesday night after the order was signed by the judge.
Police, with the assistance of the FBI, were scouring online records and other resources and speaking with the shooter’s parents and classmates in an attempt to determine a motive for the shooting, Barnes told the AP.
Police don’t know if anyone was targeted in the attack or if the attack had been planned in advance, the chief said. Police said the shooting occurred in a classroom where a study hall was taking place involving students from several grades.
“I do not know if if she planned it that day or if she planned it a week prior,” Barnes said. “To me, bringing a gun to school to hurt people is planning. And so we don’t know what the premeditation is.”
On a Madison city website providing details about the shooting, police disclosed Wednesday that two guns were found at the school, but only one was used in the shooting. A law enforcement source previously told CBS News the weapon used appears to have been a 9 mm pistol.
Barnes told the AP that he did not know how the suspected shooter obtained the guns and he declined to say who purchased them, citing the ongoing investigation.
No decisions have been made about whether Rupnow’s parents might be charged in relation to the shooting, but they have been cooperating, Barnes told the AP.
Abundant Life is a nondenominational Christian school that offers prekindergarten classes through high school. About 420 students attend the institution.
The Dan County Medical Examiner’s Office identified the two people killed Wednesday as 42-year-old Erin West and 14-year-old Rubi Vergara.
An online obituary on a local funeral site stated Vergara was a freshman who leaves behind her parents, one brother, and a large extended family. It described her as “an avid reader” who “loved art, singing and playing keyboard in the family worship band.”
West’s exact position with the school was unclear.