CBS News
3 big CD mistakes to avoid this fall
Getty Images
With interest rates at their highest levels in decades, many savers have been turning to certificates of deposit (CDs) to maximize the returns on their hard-earned money. That’s a smart strategy to utilize, considering that many CDs offer returns that outpace traditional savings accounts and even some high-yield alternatives. That lets you rake in hefty returns — and when you consider the other benefits CDs offer, it’s easy to see why these deposit accounts are so popular.
Those benefits include the fixed rate of return that CDs offer. Unlike standard savings accounts, which are subject to fluctuating interest rates, CDs lock in a fixed rate for the entire account term. This feature is particularly attractive in the current environment, where rates remain high but are likely to change soon.
Before rushing to open a CD, though, it’s important to understand that there are a few big mistakes you should steer clear of. By knowing what they are and how to avoid them, you can maximize the potential of your CD investment this fall.
Want to rake in the returns on your savings? Find out the top CD rates available to you here.
3 big CD mistakes to avoid this fall
If you plan to open a CD soon, make sure you steer clear of these big mistakes:
Waiting too long to open one
One of the biggest mistakes you can make when opening a CD this fall is procrastination. While it might be tempting to try and wait for even higher rates to emerge, the current economic indicators suggest that now is the time to lock your rate in.
With inflation cooling over the last four months, the Federal Reserve is now widely expected to conduct its first rate cut in September. When this happens, it could have a significant impact on CD rates, potentially marking the end of the high-yield environment savers have been privy to. By opening a CD now, though, you can secure one of today’s high rates before they start to decline.
Compare your top CD account options and find the right one for you now.
Focusing solely on the APY
While a high annual percentage yield (APY) is undoubtedly attractive, it shouldn’t be the only factor guiding your CD selection. After all, other aspects can significantly impact the overall value and suitability of the CD. Some key factors to consider beyond the APY include:
The early withdrawal penalty
Life is unpredictable, and you may need to access your funds before the CD matures, so understanding the early withdrawal penalty is crucial. Some banks charge a flat fee, while others may forfeit a certain number of months’ interest. If you’re concerned about needing access to your money, a slightly lower APY with a more lenient early withdrawal policy might be more beneficial in the long run.
The minimum and maximum deposit requirements
CDs often come with both minimum and maximum deposit limits, so ensure that the CD you’re considering aligns with the amount you’re planning to invest. Some high-yield CDs may require substantial minimum deposits, which might not be feasible for everyone. Conversely, if you have a large sum to deposit, be aware of any maximum deposit limits that would reduce your APY.
The term length
The duration of the CD you choose is a critical factor, so be sure to weigh your financial goals and liquidity needs before deciding. While longer terms will lock in your rate for a longer period, guaranteeing your returns for longer, they also mean your money is tied up for an extended period. A shorter-term CD, even with a slightly lower rate, might be preferable if you anticipate needing the funds sooner.
The additional features
Some CDs offer unique features like rate bump-ups or no-penalty withdrawals. These features might make a CD with a slightly lower APY more attractive overall.
Not laddering your CDs
Another mistake that’s easy to make is putting all of your funds into a single CD. While this approach can seem straightforward, it often leads to missed opportunities and reduced flexibility, so you may want to ladder your CDs instead.
When you ladder your CDs, you divide your investment across multiple CDs with different maturity dates. For example, instead of investing $10,000 in a single 5-year CD, you might split it into five $2,000 CDs with terms of one, two, three, four and five years. This gives you access to a portion of your investment at regular intervals, ensuring you have access to some of your funds without paying extra fees.
As each CD matures, you also have the opportunity to reinvest at the current market rates. This helps you take advantage of rising rates, should rates tick back up in the future, while protecting against being locked into low rates for extended periods.
The bottom line
CDs can be a valuable component of a diversified savings strategy, offering stability and guaranteed returns. By avoiding these three common mistakes – waiting too long to open a CD, focusing solely on APY and not laddering your CDs – you’ll be well-positioned to make the most of the current high-interest rate environment this fall.
CBS News
Yellowstone hiker burned when she falls into scalding water near Old Faithful, park officials say
Yellowstone National Park, Wyo. — A New Hampshire woman suffered severe burns on her leg after hiking off-trail in Yellowstone National Park and falling into scalding water in a thermal area near the Old Faithful geyser, park officials said.
The 60-year-old woman from Windsor, New Hampshire, along with her husband and their leashed dog were walking off a designated trail near the Mallard Lake Trailhead on Monday afternoon when she broke through a thin crust over the water and suffered second- and third-degree burns to her lower leg, park officials said. Her husband and the dog weren’t injured.
The woman was flown to Eastern Idaho Regional Medical Center in Idaho Falls, Idaho for treatment.
National Park Service / Jacob W. Frank
Park visitors are reminded to stay on boardwalks and trails in hydrothermal areas and exercise extreme caution. The ground in those areas is fragile and thin and there’s scalding water just below the surface, park officials said.
Pets are allowed in limited, developed areas of Yellowstone park but are prohibited on boardwalks, hiking trails, in the backcountry and in thermal areas.
The incident is under investigation. The woman’s name wasn’t made public.
This is the first known thermal injury in Yellowstone in 2024, park officials said in a statement. The park had recorded 3.5 million visitors through August this year.
Hot springs have injured and killed more people in Yellowstone National Park than any other natural feature, the National Park Service said. At least 22 people have died from hot spring-related injuries in and around the 3,471-square-mile national park since 1890, park officials have said.
TRENTON, N.J. — Democratic Newark City Council President LaMonica McIver has defeated Republican small businessman Carmen Bucco in a contest in New Jersey’s 10th Congressional District that opened up because of the death of Rep. Donald Payne Jr. in April.
McIver will serve out the remainder of Payne’s term, which ends in January. She and Bucco will face a rematch on the November ballot for the full term.
McIver said in a statement Wednesday that she stands on the “shoulders of giants,” naming Payne as chief among them.
She cast ahead to the November election, saying the right to make reproductive health choices was on the ballot as well as whether the economy should benefit the wealthy or “hard working Americans.”
“I will fight because the purpose of politics and the purpose of our vote is to give the people of our communities and our nation a bold voice,” she said.
Bucco congratulated McIver on the victory in a statement but said he’s looking forward to the rematch in November.
“I am not going anywhere,” he said in an email. “We still have a second chance to make district 10 great again!”
Who are LaMonica McIver and Carmen Bucco?
McIver emerged as the Democratic candidate in a crowded field in the July special election. A member of the city council of New Jersey’s biggest city since 2018, she also worked for Montclair Public Schools as a personnel director and plans to focus on affordability, infrastructure, abortion rights and “protecting our democracy,” she told The Associated Press earlier this summer.
Bucco describes himself on his campaign website as a small-business owner influenced by his upbringing in the foster system. He lists support for law enforcement and ending corruption as top issues.
The 10th District lies in a heavily Democratic and majority-Black region of northern New Jersey. Republicans are outnumbered by more than 6 to 1.
It’s been a volatile year for Democrats in New Jersey, where the party dominates state government and the congressional delegation.
Among the developments were the conviction on federal bribery charges of U.S. Sen. Bob Menendez, who has denied the charges, and the demise of the so-called county party line — a system in which local political leaders give their preferred candidates favorable position on the primary ballot.
Democratic Rep. Andy Kim, who’s running for Menendez’s seat, and other Democrats brought a federal lawsuit challenging the practice as part of his campaign to oust Menendez, who has resigned since his conviction.
Watch CBS News
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.
Yellowstone hiker burned when she falls into scalding water near Old Faithful, park officials say
Wagon rolls over at Wisconsin apple orchard injuring about 25 children and adults
St. Paul City Council gives cannabis zoning the green light
Yellowstone hiker burned when she falls into scalding water near Old Faithful, park officials say
Wagon rolls over at Wisconsin apple orchard injuring about 25 children and adults