--- title: Investing in CDs Is Not Exciting — but It’s a Great Move Right Now description: The best time to buy a CD could be now. CD rates probably won't stay high when the Federal Reserve starts cutting interest rates in 2024. authors: - name: Mary Ellen Cagnassola role: Reporter url: https://money.com/author/mary-ellen-cagnassola/ bio: Mary Ellen (M.E.) Cagnassola is a former reporter at Money, where she covered Social Security, retirement, housing, and employment. Her work reflects her commitment to service and equity in consumer finance. education: Rutgers University, BA Journalism at_money_since: 2021 articles: 205 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Economy and Politics - Education - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Pets - Professional Services - Retirement - Shopping - Taxes former_staff: true editors: - name: Julia Glum role: Managing Editor url: https://money.com/author/julia-glum/ bio: Julia Glum joined Money in 2018 and specializes in covering financial trends that affect everyday Americans' wallets. She also writes Dollar Scholar, a weekly newsletter that teaches young adults how to navigate the messy world of money. education: University of Florida at_money_since: 2018 articles: 453 covers: - Banking - Business - Career Advice - Credit - Credit Cards - Debt - Economy and Politics - Education - Health and Wellness - Housing - Identity Theft - Insurance - Investing - Lifestyle - Loans - Mortgages - Personal Finance - Professional Services - Retirement - Shopping - Taxes - Technology also_seen_in: - Newsweek - International Business Times - CBS News - Good Morning America - WUSA9 - Pix 11 - The New York Times - Mashable - The Washington Post - CNBC - Politico social: - https://x.com/superjulia - https://www.linkedin.com/in/julia-glum published: '2023-12-07T20:19:11.000Z' modified: '2024-12-23T18:46:55.000Z' section: Banking tags: - News word_count: 807 canonical: https://money.com/investing-cds-great-move-now/ type: NewsArticle source: structured-blocks --- > **Disclosure:** We may earn a fee if you click on the links below. Compensation does not determine ranking. Not all brands are included. [Learn more](https://money.com/page/disclaimer/). ![A steel safe with chains wrapped around it surrounded by small numbers in the background](https://img.money.com/2023/12/News-High-Yield-Savings-CD.jpg) Certificates of deposit, or [CDs](https://money.com/best-cd-rates/), might not be the most exciting way to invest your money — but they can certainly be one of the most fool-proof. That's especially true right now because interest rates are the highest they’ve been in 22 years. The Federal Reserve's inflation-busting rate hikes pushed [annual percentage yields (APYs)](https://money.com/what-is-an-annual-percentage-yield-apy/) on some CDs upwards of 5% in 2023. But with the central bank poised to pull back and [cut interest rates](https://money.com/fed-cut-interest-rates-predictions-2024/), time may be running out for investors to take advantage of those exceptional APYs. With CDs, you can lock in a fixed interest rate over a certain length of time, usually from three months to 5 years. Rates vary by institution and term length, but prior to the period of soaring inflation that began in mid-2021, you would be lucky to find a CD with an APY as high as 3%. ## Save and grow your money without incurring risk — open a CD Account ### If you want your money to work a little harder but aren't sure about investing in stocks or bonds, look into a Certificate of Deposit (CD) with Bread Financial. Click on your state to open a CD account today! [See Offer](https://money.com/pr/j2ef08ad27bf?ap_referrer=%2Finvesting-cds-great-move-now%2F) Once your CD matures, you receive your initial deposit as well as the interest you earned. Let’s say you put $10,000 into a one-year CD with an APY of 5%: After 12 months, you’d walk away with $10,500. CDs are a stable way to earn interest and tend to offer better rates even than [high-yield savings accounts](https://money.com/best-high-yield-savings-accounts/), Frank Newman, portfolio manager at Ally Bank, tells Money. While they may not quite touch the returns you might get investing in stocks and bonds, they can reduce your overall portfolio risk while boosting your savings — if you strike while the iron is hot, that is. ## Should I buy a CD now? When interest rates go up, APYs typically do, too: Financial institutions tend to pass higher interest rates down the ladder to consumers because it becomes more costly for them to borrow from one another. They generally increase rates on savings products, including CDs, as a way to compel consumers to put — and leave — their money in the [bank](https://money.com/best-banks/). The Fed hiked the effective federal funds rate to about 5.3% in August and left it at that level for September, October and November as headline inflation cooled. At 3.2%, inflation is still higher than the 2% target goal, and the Fed hasn't officially announced end to the interest rate increases. It can start cutting rates at any time and bring APYs down with them, but there’s no way to predict when that will actually happen. Some experts say rate cuts could begin as soon as the first quarter of 2024, while others previously told Money that May or June is a more likely. It's anyone's guess, but one thing is for certain. APYs as high as today’s don’t come around very often — and with interest rates widely expected to start a slow decline sometime next year, they may not be around much longer. Before you rush to buy a CD, Newman recommends reviewing your unique financial situation. CDs can be beneficial for a lot of people, but not everyone, and he says they should be used in conjunction with other investments that align with your financial goals and risk tolerance. “Since most CDs offer a fixed interest rate for a specified term, they can act as a safe haven during times of market volatility — and potentially offset losses in riskier investments when stock markets are down,” he says. However, most CDs have early withdrawal penalties. If you think you’ll need to access your money before your CD matures, you might want to opt for a more liquid option like a [high-yield savings](https://money.com/what-is-a-high-yield-savings-account/) or [money market account](https://money.com/best-money-market-accounts/). Always look at the penalties for early withdrawal so you know what the consequences will be, and opt for CDs with the most reasonable fees. Make sure to shop around to see which CD offers the highest APY. You should also consider term length — shorter terms can offer faster access to your cash and returns, but longer terms may offer higher APYs. ## CDs with high APY above 5% There are a plethora of credit unions and digital and traditional banks offering CDs above 5% at varying term lengths. You may want to check your local institutions to find out if there are any high-yield CDs specific to your location. To get you started, here are a few nationally available CDs with APYs of 5% or higher: - [Marcus by Goldman Sachs](https://money.com/pr/me7e049f6427?ap_referrer=https%253A%252F%252Fmoney.com%252Finvesting-cds-great-move-now%252F): 6- to 18-month CD (5.30% APY) - [Western Alliance Bank:](https://money.com/pr/dd3e32dc72a3?ap_referrer=https%253A%252F%252Fmoney.com%252Finvesting-cds-great-move-now%252F) 3- to 12-month CD (5.51%-5.70% APY) - [Sallie Mae Bank](https://money.com/pr/mf79db82f853?ap_referrer=https%253A%252F%252Fmoney.com%252Finvesting-cds-great-move-now%252F): 12- to 18-month CD (5.25-5.55% APY) - [Synchrony Bank](https://money.com/pr/i24cfccef3f5?ap_referrer=https%253A%252F%252Fmoney.com%252Finvesting-cds-great-move-now%252F): 9-month CD (5.50% APY) - [Barclays](https://money.com/pr/v5d7482c5d6a?ap_referrer=https%253A%252F%252Fmoney.com%252Finvesting-cds-great-move-now%252F): 12- to 24-month CD (4.15 and 3.00% APY) - [Everbank](https://money.com/pr/ebc5cfd40f44?ap_referrer=https%253A%252F%252Fmoney.com%252Finvesting-cds-great-move-now%252F): 9- to 12-month CD (5.0-5.50% APY) - [Ally](https://money.com/pr/c92678cdd741?ap_referrer=https%253A%252F%252Fmoney.com%252Finvesting-cds-great-move-now%252F): 6- to 18-month CD (5.0-5.15% APY) ![](https://s3.consumersadvocate.org/prd/image/image/36133/medium_540498b7-511a-4fa5-8824-09ca78d750b2.webp) Start growing your savings today with a CD from Bread Financial [See Offer](https://money.com/pr/gef6655c2bc3?ap_referrer=%2Finvesting-cds-great-move-now%2F) ```json { "@context": "https://schema.org", "@graph": [ { "@type": "BreadcrumbList", "@id": "https://money.com/investing-cds-great-move-now/#breadcrumb", "itemListElement": [ { "@type": "ListItem", "position": 1, "name": "Home", "item": "https://money.com" }, { "@type": "ListItem", "position": 2, "name": "Banking", "item": "https://money.com/banking/" }, { "@type": "ListItem", "position": 3, "name": "Certificates of Deposit", "item": "https://money.com/certificates-of-deposit/" }, { "@type": "ListItem", "position": 4, "name": "Investing in CDs Is Not Exciting — but It’s a Great Move Right Now" } ] }, { "@type": "WebSite", "@id": "https://money.com/#website", "url": "https://money.com", "name": "Money", "publisher": { "@id": "https://money.com/#organization" } }, { "@type": "WebPage", "@id": "https://money.com/investing-cds-great-move-now/#webpage", "url": "https://money.com/investing-cds-great-move-now/", "name": "Investing in CDs Is Not Exciting — but It’s a Great Move Right Now", "isPartOf": { "@id": "https://money.com/#website" }, "datePublished": "2023-12-07T20:19:11.000Z", "mainEntity": { "@id": "https://money.com/investing-cds-great-move-now/" }, "inLanguage": "en-US", "breadcrumb": { "@id": "https://money.com/investing-cds-great-move-now/#breadcrumb" }, "dateModified": "2024-12-23T18:46:55.000Z" }, { "@type": "NewsArticle", "headline": "Investing in CDs Is Not Exciting — but It’s a Great Move Right Now", "articleSection": "Banking", "image": [ { "@type": "ImageObject", "url": "https://img.money.com/2023/12/News-High-Yield-Savings-CD.jpg", "width": 2304, "height": 1536, "caption": "News-High-Yield-Savings-CD" } ], "author": [ { "@type": "Person", "name": "Mary Ellen Cagnassola", "url": "https://money.com/author/mary-ellen-cagnassola/", "@id": "https://money.com/author/mary-ellen-cagnassola/#author", "description": "Mary Ellen (M.E.) 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