“It’s a really timely opportunity to invest.” “They’re fantastic rates and something we haven’t seen for a while,” says Lili Vasileff, a financial planner based in Greenwich, Conn. Buying CDs now would mean locking in high rates before they fall.
The same is true of other places investors like to stash cash, such as savings accounts and money-market funds.īut there’s good news: Unlike most savings vehicles, CDs allow you to capture an interest rate for several months or years, depending on its term length. Now that the inflation rate has come down, many investing pros see two possible outcomes for interest rates in 2024: one in which the Fed has little choice but to cut rates steeply, and another in which the Fed can cut rates modestly.Įither scenario would eventually result in CD rates decreasing, since rates on CDs tend to quickly follow Fed moves. As the Fed hiked rates over the past 20 months to tamp down soaring prices for consumer goods, CDs became an attractive place to place short-term savings. Interest rates that banks pay on certificates of deposit are closely tied to short-term interest rates set by the Federal Reserve. But thanks to current economic conditions-including an easing of inflation-experts say those high rates likely won’t last and that now’s the time to lock them in. Savers have been enjoying the best rates on CDs in years.
