At this point, June is rapidly coming to a close. But if you have some mid-year goals you’re trying to achieve, like finally cleaning out your closet, you still have an opportunity (albeit a small one) to hit them in time.
One task you may want to tackle this month is opening a CD. Here are three great reasons to move forward with one before June comes to an end.
1. You’re saving for a near-term goal and don’t want to risk losses
When you invest money, there’s always the risk of losing money. Now you can lower that risk by investing over a long period of time, which allows you to ride out market downturns.
But still, there’s no such thing as a risk-free investment. So if you’re saving for a short-term goal, then keeping your money in cash is your best bet.
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Capital One 360 Performance Savings 
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APY 4.25%
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Now, you could keep it in a regular savings account. But given today’s CD rates, you could earn more interest by opening a CD — so why not do that?
Also, with a CD, your interest rate is guaranteed. The rate on your savings account could change overnight, and there’s nothing you can do about it. Your bank isn’t even required to give you any advanced warning.
Most CDs hit you with a penalty for taking an early withdrawal. But that could be a good thing, as it might motivate you to leave your money alone so you’re able to meet the goal you’ve set. With a savings account, you might dip in and withdraw some of your money when temptation strikes, turning your near-term goal into a longer-term one accidentally.
2. You’re not sure what you want to do with your money
Maybe you inherited $10,000, which is the largest sum of money you’ve ever had to your name. If so, you may have no idea what to do with it. And if you need a little time to figure things out, a 3- or 6-month CD could be a good place to park your cash.
This way, you get some guaranteed interest on that money while you explore different options. You can also take your time finding a good financial advisor who can potentially help you put your money to good use.
To be clear, you may be unsure of what to do with your money even if it’s cash you’ve saved yourself. Either way, it’s OK to use CDs to bide your time, as long as you don’t do that for too long.
3. You want to lock in a great APY before rates start to fall
It’s pretty easy to find a CD paying 5% today, and some are even paying a touch more. But the reason CD rates are so strong right now is because the Federal Reserve raised interest rates multiple times in 2022 and 2023 to fight inflation.
At this point, though, the Fed is looking to cut rates. And the central bank’s first rate cut is expected to arrive at some point before the end of the year.
We don’t know exactly when it’ll happen, but we do know that the Fed is scheduled to meet again in July. So if you’re happy with today’s CD rates, you may want to lock one in before a potential rate cut leaves you with lower APYs to choose from.
You may have a number of big items to check off your to-do list before the end of June. But if these situations apply to you, opening a CD should be one of them.
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