The other day, I found myself staring at my static savings account balance, kind of like when you open the fridge for the fifth time, hoping something new will appear. My money was just sitting there in the bank, earning next to nothing. That’s when I realized I wasn’t taking advantage of the moment. 

All the financial headlines talk about interest rates being at 20-year highs. We’re living in a rare period with certificates of deposit offering yields we haven’t seen in over a decade. The Federal Reserve isn’t planning to cut interest rates until the fall (at the earliest), which means locking up your money in a CD before the summer ends is a sensible move. 

In fact, I’d argue that putting money into a low-risk CD with competitive returns is a power move, a small rebellion against a volatile market and the usual slow drip of savings growth. 

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A CD is a smart move for safe savers

Many people are scared to invest and nervous about spending right now. Stock market swings, tariff fallout and stupidly high prices are making savers run to safety. 

CDs aren’t exciting, and they won’t make you rich overnight. But boring and predictable can be a good thing, especially when the economy is too exciting (in a bad way). 

When you lock up your savings into a CD for a set term and leave it untouched, your earnings are guaranteed. Your annual percentage yield (APY) won’t drop even if overall interest rates drop. It’s a quiet, easy way to get a little extra cash, kind of like discovering a $10 bill in your jeans pocket every month.

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Don’t wait too long to open a CD

The Federal Reserve is expected to leave its benchmark interest rate the same at this week’s meeting on June 18 and again on July 30. Experts say the central bank will keep borrowing rates high for a couple of months, with most saying a rate cut isn’t likely until its Sept. 17 meeting. 

After the Fed hiked its benchmark interest rate several times between 2022 and 2023, many banks raised the rates they were offering for savings accounts and CDs to attract more customers and boost their cash flow. Once the Fed started cutting rates last year, banks started lowering their APYs so they wouldn’t have to pay as much interest to customers.

With interest rates steady so far this year, CD rates have hovered around the same mark for months. The best CDs offer APYs up to 4.50%, more than three times the national average for some terms. That’s why you shouldn’t wait to open a CD. Rates could start slipping in late summer, even in anticipation of a rate cut. 

Bottom line? If you have extra money, move it somewhere safe so it can actually grow. 

High-yield savings accounts also offer good returns

If you think you’ll need access to your money, a high-yield savings account could be a better fit. Most CDs impose a penalty if you pull out your funds before the maturity date, but a HYSA is more flexible, allowing you to add deposits and withdraw funds as needed. 

Some APYs on high-yield savings accounts are also in the 4% range, making them a better option over traditional savings accounts. But, unlike a CD, HYSAs don’t lock in your interest rate, so your returns are variable and less predictable. 

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