3 times a CD is worth it (2024)

With stock market returnsuneven and the results of inflationstill being felt throughout the country, many Americans are eagerly exploring new ways to protect and grow their money. This can take many forms, from refinancingto shoring up insurance policiesand more. For those with money already in the bank it can mean opening up a certificate of deposit (CD) account. This can be done by transferring money from an existing account into a CD or simply by closing one account and using that money to fund a CD instead.

But is a CD worth opening now, or is there a better way to protect your money? Below we will explore three times when a CD is worth opening.

Start by checking today's CD interest rates to determine if it makes sense for you or simply use the table below to explore some local options.

3 times a CD is worth it

Here are three times a CD is worth opening.

When interest rates are high

While a spike in interest ratesisn't great for homebuyers or those looking to refinance, it's generally favorable for those looking to open a CD or a high-yield savings account. So with interest rates being what they are, March 2023 is a great time to open a CD. Interest rates on these accounts are currently around 3.5% to 4.5% or higher depending on the lender and other factors. Compare that to the 0.33% you can earn with a traditional savings account and it's clear a CD is worth opening now. You can get started hereor use the table below to explore your local offers.

When you want to protect your money

When you put your money into a CD you won't be able to touch it without penalty until the term you agreed to expires. While this may not be great for those accustomed to making continuous withdrawals it can be worth it as a last-ditch effort to protect your money. By locking it away for a set period of time you know that it'll be protected (and grow, thanks to interest) without interruption. Considering the alternative of leaving it accessible may result in it being used, CDs are a worthwhile way of protecting your hard-earned money.

When you can afford to leave it untouched

While it's generally worth opening a CD when interest rates are high and when you want to safeguard your money, it's truly only valuable when you can afford to leave it untouched. If you need all of the money in your account to be accessible as cash or to pay bills then a CD is not worth opening. You'll pay penalties to withdraw it early - reducing both your bottom line and any potential interest you can earn (and compound over time). But if you can afford to leave it untouched for the duration of your term then a CD is probably worth it for you.

The bottom line

In the current rate environment accounts like high-yield savings and CDs are generally worth pursuing. For those looking to time the opening of a certificate of deposit, it's generally valuable to act when interest rates are high and you're looking for a secure way to protect your account. It's also worthwhile for money that you're already accustomed to leaving undisturbed in the bank. Explore your CD options online today and start earning more interest now!