CDs offer a safe way to park money and earn a guaranteed return in today’s economy, where inflation and interest rates are fluctuating. With annual percentage yields (APYs) as high as 4.65%, CDs can provide significant returns compared to traditional savings accounts. Unlike savings accounts, which have variable APYs, CDs offer fixed rates that can help maximize your returns even when overall interest rates are down.
Experts recommend comparing rates before opening a CD account to get the best APY possible. Key benefits of CDs include competitive rates, guaranteed returns, and low risk. However, CDs also come with a barrier to access, as early withdrawal penalties can apply if you take your money out before the term is up.
To determine if a CD is right for you, ask yourself when you’ll need your funds, how much you have to deposit, whether you want to add money over time, and if you need some discipline. CDs are great for savings goals with a set timeline, but they may not be suitable for emergency funds or investments with higher potential returns.
CDs have plenty of perks, but it’s essential to weigh the pros and cons before making a decision. With over 50 banks, credit unions, and financial companies tracked by CNET, there are many options available. By evaluating CD rates based on APYs, product offerings, accessibility, and customer service, you can find the best fit for your money management needs.
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Source: https://www.cnet.com/personal-finance/banking/cds-can-be-a-smart-alternative-to-traditional-savings-accounts-todays-cd-rates-march-3-2025