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Should you open another CD after your first one matures? Here’s what experts suggest
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Savers, and certificate of deposit (CD) holders in particular, have had it good for the last few years. As the Fed has held off on cutting interest rates, CDs and other savings accounts have maintained their high rates and offered great returns. But what should you do when your CD account matures?
Once your CD term ends, you have a few choices — including opening another CD account. What makes sense, though, ultimately depends on your financial goals and needs.
Explore today’s top CD rates and start earning more interest now.
Should you open another CD after your first one matures? Here’s what experts suggest
Here’s what experts say about whether it makes sense to open another CD after your current CD account matures.
Yes, you should open another CD after your first one matures
With interest rates relatively high right now, opening another CD after your current account matures can be a great way to lock in a solid rate — especially considering rates are expected to drop later this year.
“If nothing has changed in your situation in terms of needing the cash that matures in the CD, it makes sense to reinvest into another CD,” says Deri Freeman, president of Estia Focused Financial. “When you do not have an immediate need for the cash but want to keep it in a safe investment for the near future, I typically see reinvestment options into new CDs available when the CD you’re in matures.”
CD laddering, or opening multiple CDs with different maturity dates, is one option to consider. By laddering your CDs, you can ensure that you’re earning a high rate of return and maintain access to your funds, whether to cash them out or to roll them into a new CD account, as your CDs will mature on staggered dates.
For example, let’s say you have $5,000 to deposit into your CDs. If you divide the money evenly across CDs with various maturity dates, that could look like:
- $1,000 in a 1-year CD
- $1,000 in a 2-year CD
- $1,000 in a 3-year CD
- $1,000 in a 4-year CD
- $1,000 in a 5-year CD
But even if you don’t ladder your CDs, opening a new CD with a solid rate after your current account matures can help you earn big returns without having to time the market.
Opening a new CD after your first one matures should align with your overall financial goals, Nadia Vanderhall, a financial educator and founder of The Brands and Bands Strategy Group, says.
“Understanding what to do next is important,” Vanderhall says. “If a consumer doesn’t have any need for the money at this time, locking in a savings rate even longer is an easy go-to.”
Opening a new CD after your first one matures could be a good idea if you don’t need the funds right away or if you can lock in a solid interest rate within the next couple of weeks or months. It could also make sense if you want to plan for guaranteed long-term growth, which other options, like stock market investments, can’t guarantee.
You also have the option to roll over your CD once it matures. Doing so will keep the money in your current CD account with the same term. Your interest rate, however, will be based on today’s rate environment, so it could differ from your current rate.
Or, you could use the money in your CD account to open another CD — either at a new financial institution or the same one — with a new term and rate.
Find out how much interest you could be earning with a top CD account today.
No, you shouldn’t open another CD after your first one matures
Opening another CD after your first one matures is one option, but it’s not the only option. After all, you might need those funds when the CD term matures, Armine Alajian, CPA, tax consultant and founder of the Alajian Group, says. So, putting the money in another type of investment could make more sense.
“You don’t need to decide right away, but it’s never too soon to start educating yourself about the various options available beyond CDs,” Alajian says. “So when your CD matures, you’re ready to make a decision.”
You may want to skip opening another CD if you want to have immediate access to your money or aren’t sure whether you’ll need access before a new CD term expires. For example, you may need to use the money to pay off debt, create an emergency fund or boost short-term savings.
“If consumers need access to their money but want a strong savings rate, [they] can’t go wrong with a high-yield savings account,” Vanderhall says.
When you need your money impacts the type of account you should have. While a CD makes sense for those who don’t need funds right away, it isn’t a good idea for those who need money right now.
“If, for example, you can find a savings interest rate that’s similar to [the] interest rate on CD, that could make a ton of sense because it remains accessible to you without any waiting period,” Freeman says.
Luckily, there are other savings options besides CDs to consider. If you want to save your cash or have it more readily available, consider alternatives after your CD matures.
Alternatives to consider after your CD matures
Once your CD matures, you have options for where to put your money. Before making a decision, though, be sure to compare different accounts and interest rates to determine what makes the most sense for you.
“First, consider your savings goals,” Alajian says. “If the goal is to earn interest yet keep the assets liquid in case of short-term needs or emergencies, a money market account can be a good choice.”
Your other savings options include:
- Traditional savings accounts: These accounts are usually offered as a companion to your checking account at traditional banks and credit unions, but in today’s rate environment, traditional savings accounts come with some of the lowest interest rates available for savers. Right now. traditional savings accounts offer, on average, an APY of 0.45%.
- High-yield savings accounts (HYSAs): High-yield savings accounts are offered by both traditional and online financial institutions, and they typically come with much higher rates compared to traditional savings accounts. Rates on these accounts can hover near or above 5% depending on where you open your account.
- Money market accounts: A money market account is a type of savings account that has checking account features. The rates on these accounts tend to be higher than what’s offered with a traditional savings account but are generally lower than what you may get with a high-yield savings account.
“You should shop around for the best interest rate,” Alajian says. “Often you’ll find that traditional savings accounts [have] the lowest rates, while MMAs, high-yield savings accounts and CDs [have] similar rates.”
Before you make a decision, though, it’s important to weigh the pros and cons of all account options available to you, including CDs.
“HYSAs might edge out the other options, but the key difference is flexibility in accessing your money,” Alajian says. “A CD locks your money in for a specific term, while a money market account or high-yield savings account won’t won’t. An MMA will often have a higher minimum deposit and balance than an HYSA.”
While CDs lock your rate for a set amount of time, rates on high-yield savings accounts tend to fluctuate. So, keep that in mind when weighing your options.
“Savings interest rates can change at any time, usually with [the] Federal Reserve announcing changes,” Freeman says. “This is an important factor to consider in your choice as well.”
A passenger successfully landed a small plane on Friday after the pilot had a medical emergency, the Federal Aviation Administration said.
The twin-engine Beechcraft King Air 90 was traveling from Henderson Executive Airport in Las Vegas, Nevada to Monterey Regional Airport in California, with a pilot and one other person on board, the FAA said.
The pilot suffered an unspecified medical emergency while flying, the FAA said, forcing the passenger to take the controls and make an emergency landing at Meadows Field Airport in Bakersfield, California.
The Kern Fire Department told CBS News affiliate KBAX that firefighters were called to a report of a medical emergency on the plane. The pilot was reported to be “incapacitated,” the fire department said. Firefighters saw the plane approach and land safely, then “chased” the plane down the runway in emergency vehicles to meet it.
The FAA did not release the passenger or pilot’s identities nor give an update on the pilot’s condition. The pilot was taken to an area hospital by ambulance. The passenger did not report any injuries.
The FAA and the National Transportation Security Board will investigate the incident, the FAA said.
Congolese authorities began vaccination against mpox on Saturday, nearly two months after the disease outbreak that spread from Congo to several African countries and beyond was declared a global emergency by the World Health Organization.
The 265,000 doses donated to Congo by the European Union and the U.S. were rolled out in the eastern city of Goma in North Kivu province, where hospitals and health workers have been overstretched, struggling to contain the new and possibly more infectious strain of mpox.
Congo, with about 30,000 suspected mpox cases and 859 deaths, accounts for more than 80% of all the cases and 99% of all the deaths reported in Africa this year. All of the Central African nation’s 26 provinces have recorded mpox cases. Officials in Congo previously told CBS News that they’ve struggled to diagnose patients and provide basic care in the vast country of 100 million people, where a fragile, under-resourced healthcare system is also burdened by the stigma associated with the virus.
Although most mpox infections and deaths recorded in Congo are in children under age 15, the doses being administered are only meant for adults and will be given to at-risk populations and front-line workers, Health Minister Roger Kamba said this week.
“Strategies have been put in place by the services in order to vaccinate all targeted personnel,” Muboyayi ChikayaI, the minister’s chief of staff, said as he kicked off the vaccination.
Moses Sawasawa / AP
At least 3 million doses of the vaccine approved for use in children are expected from Japan in the coming days, Kamba said.
Mpox, also known as monkeypox, had been spreading mostly undetected for years in Africa before the disease prompted the 2022 global outbreak that saw wealthy countries quickly respond with vaccines from their stockpiles while Africa received only a few doses despite pleas from its governments.
However, unlike the global outbreak in 2022 that was overwhelmingly focused on gay and bisexual men, mpox in Africa is now being spread via sexual transmission as well as through close contact among children, pregnant women and other vulnerable groups, Dr. Dimie Ogoina, the chair of WHO’s mpox emergency committee, recently told reporters.
More than 34,000 suspected cases and 866 deaths from the virus have been recorded across 16 countries in Africa this year. That is a 200% increase compared to the same period last year, the Africa Centers for Disease Control and Prevention said.
A lack of diagnostic materials and basic medicines to treat the virus, which can improve survival rates, have also hampered efforts to contain the outbreak, and access to vaccines remains a challenge.
Moses Sawasawa / AP
The continent of 1.4 billion people has only secured a commitment for 5.9 million doses of mpox vaccines, expected to be available from October through December, Dr. Jean Kaseya, head of the Africa CDC, told reporters last week. Congo remains a priority, he said.
At the vaccination drive in Goma, Dr Jean Bruno Kibunda, the WHO representative, warned that North Kivu province is at a risk of a major outbreak due to the “promiscuity observed in the camps” for displaced people, as one of the world’s biggest humanitarian crisis caused by armed violence unfolds there.
The news of the vaccination program brought relief to many in Congo, especially in hospitals that had been struggling to manage the outbreak. Doctors with several charities working in the country have told CBS News they’re overstretched and short on supplies, even having to use tents and mattresses on the floor of makeshift isolation wards to treat a constant influx of patients.
“If everyone could be vaccinated, it would be even better to stop the spread of the disease,” said Dr. Musole Mulambamunva Robert, the medical director of Kavumu Hospital, one of the mpox treatment centers in eastern Congo.
Eastern Congo has been beset by conflict for years, with more than 100 armed groups vying for a foothold in the mineral-rich area near the border with Rwanda. Some have been accused of carrying out mass killings.
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