Is a CD or a high-yield savings account better to open this September?
Summary
The Federal Reserve may raise interest rates soon, which could affect how much money savers earn. Certificates of deposit (CDs) have fixed rates that are often higher now, while high-yield savings accounts have variable rates that could rise if rates go up. Choosing between the two depends on whether you want a guaranteed return or flexibility to access your money.Key Facts
- The Federal Reserve might increase interest rates at its next meeting on September 16.
- CDs currently offer higher fixed interest rates than high-yield savings accounts.
- High-yield savings accounts have variable rates that can change with the economy.
- CDs lock in your interest rate for a set term, but withdrawing early can lead to penalties.
- High-yield savings accounts let you withdraw money anytime without fees.
- If rates rise, high-yield savings accounts could become more profitable than CDs.
- Online banks often offer better rates on both CDs and high-yield savings accounts than traditional banks.
- Traditional savings accounts pay very low interest, usually under 0.40%.
Read the Full Article
This is a fact-based summary from The Actual News. Click below to read the complete story directly from the original source.
