The Fed has put interest rate hikes on hold. Here’s why you should open a CD now.

After ten rate hikes through March 2022, the Federal Reserve had some welcome news on Wednesday: They are holding off on raising interest rates. Benchmark interest rates will remain unchanged between 5% and 5.25%.

While the break won’t last, it’s still better than seeing rates move higher. And it could provide some much-needed relief to borrowers. Rate on everything from the mortgage per Credit card per personal loan They have been higher in recent months than in years

“The Committee seeks to achieve maximum employment and inflation at a rate of 2 percent over the long term. In support of these goals, the Committee decided to maintain the target for the federal funds rate at 5 to 5-1/4 percent,” Fed said Time to declare a break. “Fixing the target range at this meeting allows the committee to assess additional information and its implications for monetary policy.”

While the rate environment will remain unchanged for the short term (the Fed doesn’t meet again until late July), Americans should take steps now to boost their savings. After pausing rates, many savers will benefit from being locked in Certificate of Deposit (CD) account now

Start by exploring your CD options here to see how much more money you can earn

Why should you open a CD now?

Interest rate on CDs Fed rates are tied to activity. As mortgage and credit card rates rise, so do CDs and High Yield Savings Account. With rates so high in recent months, CDs are a smart place to park your money. It was easily found by shopping around A CD offering a 5% APY with no fees Eat away your earnings.

But now that rates are stagnant, that 5% is probably the most you’ll be able to get, at least for the foreseeable future. And if rates stabilize or eventually decline later in the year APYs will go south. This is why you now need to open a CD. Unlike high yield savings account rates, Rate in CD The APY offered is locked in when you open the account. So if the higher rate environment remains or declines, you’ll still enjoy the benefits of the higher rate you secured when the climate was different.

But you have to act relatively quickly. No one knows for sure where the rate environment is going in the second half of the year. So, secure a high interest rate CD now and start earning more money today.

Other benefits of CD should be known

A high interest rate isn’t the only reason to open a CD now Here are two more CD benefits to know:

Money is saved

The money you put in a CD is FDIC-insured up to $250,000 per account per bank. So you don’t have to worry Banking failure. And if you have more than $250,000 to deposit, you can spread it across multiple CDs, preferably with different maturity dates and rates (also known as CD ladder strategy)

But the money in the account will also be protected from a constant cycle of deposits and withdrawals. Because the money is locked — and you have to pay a penalty to get it — the money you put in a CD is more secure than if you put it in a savings account with easy access.

Minimum fees and penalties

Because the money you deposit into a CD won’t be touched (unless you’re willing to pay a hefty penalty) savers won’t suffer any minimum fees or penalties for maintaining their accounts. There are several online CDs that won’t charge for account maintenance, allowing your money to grow perfectly at that high interest rate. And because you know the rate is locked in, you’ll be better able to budget and manage expectations as the CD matures.

Learn more here.

Bottom line

CDs are an attractive way to grow and protect your savings in an otherwise volatile economy. But with the Fed’s decision to finally stop raising interest rates, the window of opportunity to max out such accounts may be closing. That’s why it’s important to open an account now — and lock in a higher rate — before the Fed makes any changes that could affect your secured rate. Start making more money (and protect the money you’ve already saved) by opening a CD now.