December is often a time filled with holiday gatherings, shopping and cooking. This year, however, it also may be a smart time to reevaluate your finances. This may mean moving your money from some traditional, low-interest earning accounts to different, higher-earning ones. With inflation down significantly from its high point and two Federal Reserve interest rate cuts already issued in , the returns on high-yield savings and certificates of deposit CD accounts have started to decline.
And with the strong likelihood of an additional interest rate cut for when the Federal Reserve meets for the final time in on December 17 and 18, the window of opportunity could soon be closed.
To take advantage while they still can, then, savers should strongly consider opening a long-term CD now, before that December Fed meeting. Below, we'll explain why. Not sure if a CD's still worth it for you? See how much more you could be earning here. Here are three reasons why savers may find it beneficial to open a long-term CD with a term longer than 12 months in advance of the December Fed meeting:.
It's important to remember that lenders don't need to wait for a formal Fed action to start changing their offers to savers. They can β and often will β adjust their rate offers in anticipation of a formal rate hike or cut. Waiting, then, won't make sense. With month CD rates around 4. If the Fed cuts rates when they meet later in December, you may regret not having acted earlier in the month. Get started with a top long-term CD online today.
Are you concerned about going over budget this holiday season? With expectations that holiday spending will exceed that from , it may make sense to add an incentive to limit your shopping tendencies. And a CD is a great way to do just that, thanks to its early withdrawal penalties for savers who access their funds prematurely. By depositing some of your money into one of these accounts now, you can more easily prevent holiday overspending than you would have by maintaining the same ease of access.
