Why should you open a long-term CD now?

For several months now, amid ongoing interest rate hikes from the Federal Reserve, many savers have made choices Short term CDs. Although not quite as flexible as variable-rate High Yield Savings Account, these certificates of deposit still allow them to take advantage of rising interest rates With a short-term CD, you can lock in a higher rate and then roll over your balance at maturity in a few months, when rates are likely to be higher.

But a rate pause is now in effect, and experts are predicting that we may be reach a peak, it may be time to reconsider. Given the changing rate tide, now may be the time for forward-thinking savers to lock in long-term CDs.

Gregory Crofton, CFP, founder of Adap Tax Financial, said recently, “To maximize savings rates today, looking at long-term CDs will allow one to lock-in a higher rate for a longer period of time.” CBS News.

Lock in one of today’s best CD rates and start making more money now.

Why should you open a long-term CD now?

When rates are rising, short-term CDs make a lot of sense. They tend to suggest good rate than high-yield savings accounts, and only need to lock your money away for a short period of time. When that period ends, you can easily transfer your cash to another account at a higher rate.

However, this thinking reverses when rates are frozen — or when you believe they may be headed lower in the near future. In fact, the most recent follow Rate breaks from the Fed, “Savers should consider that savings rates may have peaked,” says Phil Rutterer, CFP, founder of Rutterer Planning. “Savers should look to lock in attractive rates for their less volatile assets.”

It is true that Long term CD Today offers slightly lower rates than short-term CDs — some top long-term CDs max out at 4.5%, while six-month to one-year CDs can More than 5%. But if rates go down, you could earn more in the long run.

Say you open a one-year CD today at 5.20% APY. In one year, the most you can get is 4.50%, then 4.00% after one year, then 3.50%. If you instead open a five-year CD earning 4.5% APY today, you can lock in that rate for the full five years. As long as you know you won’t need to access it up front, you can earn more over the entire term and avoid the hassle of moving your money around each time the short CD matures.

Explore today’s best CDs here and lock in a great rate today

Best long term CD rates

Here are some long term CDs Online Bank Today offers the best yields. Each of the following is FDIC-insured up to a $250,000 limit.

Popular Straight 5-Year CD: 4.53% APY

The five-year CD option from Popular Direct earns 4.53% APY. This account is for savers who already have fairly high balances, as it requires a $10,000 minimum deposit. There are no monthly maintenance fees.

Bread Savings 3-year CD: 4.50% APY

You’ll get 4.50% APY with a three-year CD term from Bread Savings, a $1,500 minimum balance and no monthly fees. While you can’t secure the rate like others on this list, we chose the three-year CD from Brad because it offers a small rate boost for customers who renew their CD after maturity. This can help you secure a better rate when your term ends, even if interest rates drop by then.

Barclays Bank 5-Year CD: 4.35% APY

With Barclays Bank, you can open a 60-month CD online and start earning 4.35% APY. There is no minimum deposit to open your account and no monthly fee, but you must fund your account within 14 days of account opening.

Ally Bank 5-Year CD: 4.10% APY

Ally Bank offers five-year CD savers 4.10% APY. You pay no monthly fees with this account and there is no minimum deposit required to open it.

Find more long-term CD options that might be best for you and compare today’s top rates here.

Bottom line

With interest rate hikes currently on hold, some experts believe we could already see that The highest rate that the bank will offer Deposit products like CDs. If you have a savings balance that you want to maximize — and you know you won’t need to access it for a few years — now may be the time to consider a long-term CD. While rates may be slightly lower than short-term options, you can lock in your APY here Today’s high rate And enjoy interest earnings for years to come, regardless of how interest rates move. See how much you can earn with today’s best CD rates here.