CDs and Savings Accounts: Why You Should Open Both Now

It’s never a bad idea to look for ways to protect and grow your money. But an economy still dealing with its nagging effects Inflation – and High interest rates To counter this – saving and protecting your money is more important. Fortunately, there is often more than one way to do this Online And from the comfort of your own home.

By opening a Certificate of Deposit (CD) or High Yield Savings Account, depositors can protect their money from market volatility and grow it at a significantly higher interest rate than they would if it were left unchanged in a regular account. Although both CDs and savings accounts have unique features, in today’s economy there is a compelling case for opening both types simultaneously.

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Why You Should Open a CD and Savings Account Now

Here are three reasons why you should open both a CD and a savings account now.

To take advantage of the rate environment

The average rate on a regular savings account is currently around 0.42%, according to FDIC. But you can get higher faster with a CD or a high-yield savings account. There are some accounts that offer 12 times the national average. Since both the accounts have comparable rates, it may make sense to open both together. CDs, in particular, will lock in your money at a higher rate for its duration duration, regardless of any large rate volatility. High-yield savings accounts, meanwhile, have adjustable interest rates but offer the flexibility and terms of use you’re already used to with a regular savings account. So consider opening both and start earning very high interest rate now.

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To help build an emergency fund

Both high-yield savings accounts and CDs can accelerate your savings goals and help you build a emergency fund more quickly By keeping money in a high-yield account, you can earn more from your hard-earned money while maintaining access to it for rainy days. Although you can’t easily withdraw your funds from a CD (unless you choose one No-penalty CD), these accounts can also help build an emergency fund, if only because they won’t be subject to the same cycle of deposits and withdrawals as your other accounts. Ideally, you can split the funds you want to keep in one account and keep half in each type. This will quickly grow your emergency fund while still providing access if you need it in an emergency sooner than expected.

To protect your money long term

Bank failure Earlier this year the stock market was fearful and many investors were turning to more traditional investments the gold. But both CD And High Yield Savings Account The bank is FDIC-insured up to $250,000 per account. So you can invest in both with a sense of peace and security that you might not have with some other options. And if you have more than $250,000 to save, you can split it so protections remain intact across both account types. If you deposit the total amount in only one account and exceed the maximum, you will remain balance unprotected. So, instead, open both types of accounts and double your protection.

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Bottom line

Both CDs and high-yield savings accounts offer savers benefits that many other accounts do not. So why not open one of each and take advantage of both? By opening both a savings account and a CD at the same time, savers can truly benefit from today’s high rate environment and earn significantly higher interest on their money. They can use both accounts as a way to boost emergency savings — a CD for the long term and a high-yield account for immediate, urgent needs. And they can double their FDIC protection by opening both account types up to the maximum insurable amount — or split the difference if they’re over the $250,000 protection limit.

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