Expert Insight on Opening a CD with Rates at 5% - What You Need to Know

3 Reasons to Reconsider Opening a CD Now

With CD rates at 5% and higher, many are tempted to open one, but is it the best choice for you?

1. Lack of Emergency Fund

• Important: 63% of Americans can't cover a $500 expense from savings
• Consider putting extra cash in a savings account for accessibility
• Today's savings accounts offer competitive rates near 5%

2. High-Interest Debt

• If carrying credit card debt, the interest paid may exceed CD earnings
• Consider paying off high-interest debt before investing in CDs

3. Long-Term Goals

• Key: Investing for retirement or other far-off goals may yield higher returns than CDs
• Stock market investments historically outpace bank account interest earnings
• Consider long-term growth potential before choosing a CD

Think through these considerations before committing to a CD, especially if your financial situation aligns with the points above.