CDs: The Unsung Heroes of a Volatile Rate Market
While savings accounts are great for flexibility, there’s another tool that deserves attention this month — the Certificate of Deposit, or CD.
A CD lets you lock in a fixed interest rate for a set term, usually anywhere from 3 months to 5 years. The catch is that you can’t withdraw the money until it matures (unless you pay a small penalty). But in exchange, you typically get a higher rate — and protection against future rate drops.
Right now, the best 7-month CDs are offering around 4.60%, and 2- to 5-year CDs are in the 4.15%–4.25% range.
Here’s why this matters: the Federal Reserve has hinted at possible rate cuts later this year or in early 2026. Once that happens, banks will lower the rates they offer on new CDs and savings accounts. But if you’ve already locked in a good rate, you’ll continue earning that higher return no matter what the Fed does.
That’s why October might actually be a perfect time to secure your yield before rates slide down.
