Why now may be the time to open a Certificate of Deposit

According to a recent survey, 60% of investors are concerned about current market volatility, with most expecting it to continue – and possibly worsen – through 2025.1 If you’re thinking about ways to help ensure stability in your portfolio, you may want to consider opening a certificate of deposit (CD).

Interest rates on CDs have been strong over the last few years as the Federal Reserve (the Fed) continues to keep interest rates higher than they were pre-inflation. The Fed announced on Wednesday, July 30 that it left the federal funds rate unchanged once again as inflation and uncertainty about the economic outlook remain elevated. 

Locking in these rates now may help your savings grow faster in 2025 –and may guard against market volatility. Your CD will provide a guaranteed return for whichever term you select, from 3 months to 5 years, regardless of the Fed’s decision.

Amidst market volatility CDs offer stability, providing assurance and security for individuals looking to protect their hard-earned savings
Robert Sousa, CFA, Director of Financial Modeling and Analysis

Why now is the opportune moment to open a CD: 

1. Protection against market volatility: Volatile markets can be nerve-wracking. CDs offer a safe haven from market turbulence, providing a fixed interest rate over a specified term. 
2. Guaranteed returns: When you open a CD, you lock in a predetermined interest rate for the duration of the term. This certainty allows you to know exactly how much you’ll earn by the end of the CD term.
3. Competitive interest rates: CDs continue to offer competitive rates compared to traditional savings accounts.
4. Diversification: CDs complement a diversified savings strategy by providing stability. By allocating a portion of your savings to CDs, you can balance higher-risk assets with low-risk options, ensuring a well-rounded savings approach.
5. Flexible term options: Whether you’re saving for a short-term goal or planning for the future, CDs offer flexibility in terms of duration. With terms ranging from a few months to several years, you can select a CD that aligns with your timeline and goals.
6. FDIC insurance: One of the most significant advantages of investing in CDs is the protection offered by the Federal Deposit Insurance Corporation (FDIC). FDIC insurance covers up to $250,000 per depositor, per insured bank, providing an additional layer of security in your investment. 

Remember, your money matters -- and it's important to make the most of it. If you need help or would like to discuss what product may be best for you, please make an appointment, call, or visit us today.