Should You Lock In 5% CD Rates Now or Wait for Rates to Peak?
-
Interest rates are expected to drop soon, but people are hesitant to lock in 5% rates on CDs now, hoping rates will go even higher.
-
Financial advisers argue that 5% is a good rate that hasn't been seen in years, and the bond market signals rates will likely be lower in 6 months.
-
There are risks to trying to time interest rate peaks perfectly to get the highest CD rates, as rates can drop suddenly once they hit a peak.
-
Banks may not want to keep paying 5% or more over longer terms, as they have to balance interest paid to depositors with interest earned from borrowers.
-
Consider laddering CDs so you always have some money to redeploy if rates rise again, and know the early withdrawal penalties in case you need to exit.