A certificate of deposit (CD) from a financial institution can earn you more in interest but comes with strings attached. Rates on CDs skyrocketed in 2023, but will the trend continue into the New Year and beyond? Our forecast explores where CD interest rates stand in 2024. The investing information provided on this page is for educational purposes only. NerdWallet does not offer advisory or brokerage services.
The best CD rates today rival those of high-yield savings — and you can lock yours in. Yes, if you need access to the money soon (or aren't sure when you'll need it). Often, the choice between a short-term or long-term CD comes down to your financial goals and timeline. CD interest rates are high in 2024 — higher nationally, on average, than they've been in more than a decade, according to Forbes Advisor.
Investing in CDs can help you earn money in interest without the risks of the stock market. Learn the three primary reasons to consider CDs. Explore Fidelity CDs. Fidelity is an investment platform that has brokered CDs with high returns, a wide range of terms, and FDIC-insured options. Certificates of deposit, or CDs, promise guaranteed returns but carry downsides, experts told ABC News.
CDs are considered a safe investment option because they are insured by the Federal Deposit Insurance Corporation (FDIC) for up to $250,000 per depositor, per insured bank. This means that even if the bank fails, your investment is protected. However, the trade-off for this security is that CDs typically offer lower returns compared to riskier investments like stocks.
While the interest rates on CDs have been on the rise, it's important to consider the potential downsides. One drawback of investing in CDs is that your money is tied up for a specific term, ranging from a few months to several years. If you need to access your funds before the CD matures, you may face penalties or forfeit some of your interest earnings.
Another factor to consider is inflation. If the rate of inflation outpaces the interest rate on your CD, your purchasing power could decrease over time. This is a risk to keep in mind when deciding whether CDs are the right investment choice for you.
In conclusion, CDs can be a good investment option for those looking for a low-risk way to earn interest on their savings. However, it's important to weigh the pros and cons carefully and consider your financial goals before committing to a CD. With interest rates on the rise in 2024, it may be a favorable time to explore CD options as part of your investment strategy.
