5-Year CDs Offer High Returns But Lock In Your Money

Interest rates are up, so 5-year CDs can currently earn over 4.5% interest. This provides a relatively high, guaranteed return without much risk.

Locking in a 5-year CD rate provides predictability and can be good for budgeting/planning. It may yield more over time than short-term CDs.

However, you miss out if rates rise further. Other investments like Treasuries offer flexibility that CDs lack.

Inflation could erode purchasing power over a 5-year term if it exceeds the CD's yield.

Consider your goals and if you need access to the money. CD laddering can provide a mix of flexibility and locked-in returns.