![]() ![]() If this rate rises, so will the rates on CDs, although sometimes with a lag. With the pace of rate increases slowing, what will happen to CD rates in the next few months?ĬD rates are correlated with the fed funds rate. CD rates vary between banks and the best CD rates are above the average. ![]() By April 2023, the average APY for one-year and five-year CDs increased to 1.54% and 1.37% respectively. Most of the increase over the past year happened in the first six months. This is a big jump from October 2022, when the average APY for a one-year CD was only 0.71% and for a five-year CD was 0.83%. The average annual percentage yield (APY) on one-year CDs was 1.79% as of October 16, 2023, and the average return on a five-year CD was 1.38%, according to the Federal Deposit Insurance Corporation (FDIC). You’ll want to consider whether CD rates will rise further in 2023. ![]() But you’ll want to pay attention to the market to continue benefiting from the best rates available.īefore investing in CDs, you should consider the future direction of market rates. Once your money is locked away, your returns are guaranteed. You lock away a sum of money for a set term and the bank agrees to pay interest at a predetermined rate, giving you a return on your investment.ĬDs are an excellent savings option when rates are high like they are now. A certificate of deposit (CD) is a time-deposit account that can be a great short-term investment tool. ![]()
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