CD Rates are Growing!

Here are some of Nerd Wallet’s top reasons for opening your next CD. 

CDs are safe investments. CDs have federal deposit insurance for up to $250,000 (or $500,000 in a joint account for two people). There’s no risk of losing money with a CD, except if you withdraw early. 

CDs have fixed rates and predictable returns. Once you open a CD, you lock in a rate. This lets you know exactly how much money you’ll earn over your CD term, whether that’s months or years. In contrast to regular savings accounts where the rate can change more often. 

CDs provide a variety of terms that can offer structure to savings goals. CD terms typically range from three months to five years, so they can be tools to set aside some of your savings for future purchases within that time period. In general, the longer the term, the higher the CD rate. And the shorter the term, the more frequent your opportunities to withdraw or renew a CD. 

Keeping some savings at a distance. CDs can be a way to stop yourself from spending an earmarked sum, whether that’s money you’ve saved up over time or a windfall such as from an inheritance. In addition, by creating a barrier to those funds with a CD, you have time to determine what to do with the money later, whether that’s investing, saving or spending it. In the meantime, your money can earn more interest than it would in a regular savings account. 

As you are agreeing not to touch that money for the term of the Certificate, you will typically earn a higher rate of interest than you would in a regular savings account or money market. Generally, the longer the term, the higher the rate. See ICCU’s CD rates and terms here.

Follow the link to see the full article. https://www.nerdwallet.com/article/banking/cds-right-now