The interest rate climate of 2022 and 2023 presented unique opportunities for savers to protect and grow their funds in an inflationary environment. Many turned to certificate of deposit (CD) accounts, earning thousands of dollars on their money. However, with the maturity date of current CD accounts approaching, especially before the end of 2024, many are wondering what’s next.
There’s a strong argument for opening a long-term CD next. Long-term protection is essential, as rates can be unpredictable and economic factors may affect your investments and savings. A locked CD rate offers significant, long-term protection against inflation and market fluctuations.
Long-term CDs also provide predictable returns, which are calculated with precision, making them less susceptible to the volatility of current interest rate climate. This stability is particularly valuable in a changing economic environment.
Opening a long-term CD may also discourage overspending, as penalties can be steep for early withdrawals. This can help savers avoid impulse purchases during the holiday season and other times when they tend to spend more than they should.
If your CD account is approaching maturity or you’re already in the CD grace period, it’s essential to decide what to do with the funds relatively quickly. Picking the right CD term is crucial to avoid unnecessary early withdrawal penalties. Consider opening a long-term CD now and secure your savings for the future.
Source: https://www.cbsnews.com/news/should-you-open-long-term-cd-after-current-account-matures