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Inflation just fell again. Here’s why you should open a long-term CD now.
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Inflation just fell for the third consecutive month. While cooling price growth may be welcomed at gas pumps and grocery stores, it can be concerning for savers who want to earn the highest returns possible. After all, lower inflation could produce lower interest rates, which may shrink returns on deposit accounts.
But you don’t have to accept those lower returns if you open a long-term certificate of deposit (CD). These unique savings vehicles make it possible to lock your rate of return in for multiple years. But, there’s a caveat. You must agree to keep your money in the account until it matures or pay a penalty to access it early. Stlll, the higher rate for a longer time period could be worth it now.
See what long-term CD rate you could lock in here now.
Why you should open a long-term CD now
As inflation falls, long-term CDs are becoming more attractive. Here are three reasons you should open one today:
Long-term CD rates are still high
One of the biggest reasons to invest in a long-term CD right now is that the return rates on these accounts are high. Many leading long-term CDs come with APYs over 4%. Some 5-year CDs are paying APYs as high as 4.80%.
But, you’ll need to act quickly to take advantage of such high rates. With the inflation rate cooling, it may only be a matter of time before today’s elevated CD rates become a thing of the past.
Earn more on your money with a long-term CD today.
Rates could fall quickly
Another reason to open a long-term CD right now is because rates could fall quickly. “As inflation continues to fall towards the long-term Fed target of 2%, we expect interest rates to follow and decline broadly,” explains Noah Damsky, CFA, principal at the financial planning firm, Marina Wealth Advisors.
While the likelihood of the Fed cutting its benchmark federal funds rate increases each time inflation cools, a formal rate cut doesn’t need to take place for lenders to start offering lower rates on their savings accounts. Financial institutions often make preemptive rate decisions based on what they think the Federal Reserve might do. So rates on CDs could drop more quickly than anticipated.
You’ll be protected even when rates are cut
If you open a long-term CD now, you’ll be protected from potential rate cuts. “A long-term CD is one way to effectively secure current interest rates before they potentially fall with inflation,” says Damsky.
CDs are fixed-rate savings vehicles that pay you the return you agree to when you open the account for its entire term. So, if you lock in a 5-year CD with a 4.80% APY now, you’ll enjoy that high return rate until the account matures in five years – even if financial institutions cut their CD rates in the future.
Don’t wait for rates to fall to lock in your long-term CD returns.
The bottom line
As inflation cools, interest rates could fall, making it important to adjust your financial strategy. Opening a long-term CD is one way to protect your savings returns in today’s economic environment. These deposit accounts currently offer high APYs, but today’s rates may not last much longer, so it makes sense to lock in a high rate now. Compare today’s highest-paying long-term CDs to protect your savings today.
Tupperware and some of its subsidiaries filed for Chapter 11 bankruptcy protection, the once-iconic food container maker said in a statement late Tuesday.
The company has suffered from dwindling sales following a surprise surge during the COVID-19 pandemic, when legions of people stuck at home tried their hands at cooking, which increased demand for Tupperware’s colorful plastic containers with flexible airtight seals.
A post-pandemic rise in costs of raw materials and shipping, along with higher wages, also hurt Tupperware’s bottom line.
Last year, it warned of “substantial doubt” about its ability to keep operating in light of its poor financial position.
“Over the last several years, the Company’s financial position has been severely impacted by the challenging macroeconomic environment,” president and CEO Laurie Ann Goldman said in a statement announcing the bankruptcy filing.
“As a result, we explored numerous strategic options and determined this is the best path forward,” Goldman said.
The company said it would seek court approval for a sale process for the business to protect its brand and “further advance Tupperware’s transformation into a digital-first, technology-led company.”
The Orlando, Florida-based firm said it would also seek approval to continue operating during the bankruptcy proceedings and would continue to pay its employees and suppliers.
“We plan to continue serving our valued customers with the high-quality products they love and trust throughout this process,” Goldman said.
The firm’s shares were trading at $0.5099 Monday, well down from $2.55 in December last year.
Tupperware said it had implemented a strategic plan to modernize its operations and drive efficiencies to ignite growth following the appointment of a new management team last year.
“The Company has made significant progress and intends to continue this important transformation work.”
In its filing with the U.S. Bankruptcy Court for the District of Delaware, Tupperware listed assets of between $500 million and $1 billion and liabilities of between $1 billion and $10 billion.
The filing also said it had between 50,000 and 100,000 creditors.
Tupperware lost popularity with consumers in recent years and an initiative to gain distribution through big-box chain Target failed to reverse its fortunes.
The company’s roots date to 1946, when chemist Earl Tupper “had a spark of inspiration while creating molds at a plastics factory shortly after the Great Depression,” according to Tupperware’s website.
“If he could design an airtight seal for plastic storage containers, like those on a paint can, he could help war-weary families save money on costly food waste.”
Over time, Tupper’s containers became popular that many people referred to any plastic food container as Tupperware. And people even threw “Tupperware parties” in their homes to sell the containers to friends and neighbors.
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