The timetable for any financial investment is critical to get right. If you invest your money too early, you may not earn the big returns you hoped for. But, if you wait too long, the opportunity may fade and you could risk losing money, instead. 

In today’s inflationary climate, in which interest rates are still high but signs of a rate cut are growing, it can be difficult for savers to know where to put their money — and where to avoid depositing it.

Fortunately, there are still two primary (and secure) ways for savers to grow their money: high-yield savings and certificates of deposit (CD) accounts. The latter type has multiple advantages in today’s unique economy but, like all financial considerations, those advantages are timely and subject to change, possibly as soon as this July. Understanding this, then, savers should consider acting now. And they should do their best to avoid making some critical CD account mistakes. Below, we’ll break down three ones to avoid next month.

Start by seeing how much more interest you could earn with a top CD account now.

3 critical CD account mistakes to avoid this July

Considering a CD account for July? Then make sure to avoid the following critical, but simple-to-make mistakes:

Not shopping for the highest rate

It’s always a mistake to not shop for the highest interest rate available, but especially so this July in the face of a possible cut to the federal funds rate. If that occurs, the rates on CDs will inevitably fall, too. Even the hint of a cut to the federal funds rate could result in lenders offering lower returns on CDs, so you’ll want to shop for the highest rate possible before depositing your money into an account. 

Every percentage point and quarter of a percentage point can help, especially now. So don’t just take the first offer you get, look both at local banks and online to find the highest one you can lock in now.

Shop for CDs with high rates online today.

Choosing a short-term CD

Short-term CDs may have slightly higher rates than their long-term counterparts right now (a direct reversal of historic norms), but that doesn’t mean you should go with this option. Short-term CDs, after all, will mature in less than a year, at which point rates on CDs may be lower than what’s available this July. 

Long-term CDs, however, last years, allowing you to lock in a high rate for 18 months to 5 years or more. That’s a major advantage in today’s evolving rate climate. So skip the short-term CD and lock in a long-term one this July instead.

Waiting for a better rate

It’s highly unlikely that CD rates will improve and rise even higher than they are right now. Rates on these accounts barely broke 1% just a few years ago. And considering that inflation has dropped dramatically in the last two years — and that it’s close to the Federal Reserve’s target 2% goal — a cut to the federal funds rate is much more likely than another hike. 

Waiting for an even higher rate and an optimal time to open a CD is unlikely to come. So, avoid waiting and be proactive. Today’s high CD rates may be the best you can secure for the foreseeable future. 

The bottom line

CDs, like any other financial product or service, are timely. So it’s incumbent upon savers to get that timing right. And, they can do so by avoiding some specific CD account mistakes this July. By shopping for the highest rate available, choosing a short-term CD over a long-term one and by locking a rate now (instead of waiting for an even better rate that may not come), savers can maximize today’s CD benefits now and for the months and years to come. Just be sure to limit your deposit to money you’re comfortable with parting with long-term or you could risk having to pay an early withdrawal penalty to regain access.

Learn more about your current CD options here.