3 CD account mistakes to avoid this September
Summary
Certificate of deposit (CD) accounts offer higher, fixed interest rates compared to regular savings accounts, making them a good choice for savers in September. However, there are common mistakes to avoid, such as opening a CD before the Federal Reserve meeting, choosing short-term CDs over long-term ones, and only using your current bank without comparing other options.Key Facts
- CD accounts pay higher fixed interest rates than traditional savings accounts.
- Withdrawing money from a CD before it matures can lead to significant early withdrawal fees.
- The Federal Reserve is likely to raise interest rates after its September 16 meeting.
- Opening a CD before the Fed’s decision may mean missing out on higher rates.
- Long-term CDs currently offer better interest rates compared to short-term CDs.
- Only choose a long-term CD if you can keep the money until it matures.
- Online banks often offer better CD rates than traditional banks with physical branches.
- Using just your current bank for CDs might cause you to miss out on higher interest rates elsewhere.
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