{"id":1027,"date":"2023-03-07T06:51:14","date_gmt":"2023-03-07T11:51:14","guid":{"rendered":"https:\/\/www.goldiumportfolio.com\/?p=1027"},"modified":"2023-03-07T06:51:14","modified_gmt":"2023-03-07T11:51:14","slug":"the-6-cd-has-arrived-should-you-bite","status":"publish","type":"post","link":"https:\/\/www.goldiumportfolio.com\/?p=1027","title":{"rendered":"The 6% CD has arrived.  Should you bite?"},"content":{"rendered":"\n

Updated: March 6, 2023 at 6:27 a.m. ET\u00a0<\/a><\/p>\n\n\n\n

Alisa Wolfson<\/a><\/h4>\n\n\n\n

Many high-yield savings accounts and CDs are paying more than they have in about 15 years.<\/p>\n\n\n\n

\"\"
GETTY IMAGES\/ISTOCKPHOTO<\/strong><\/figcaption><\/figure>\n\n\n\n

Thanks to rapidly rising interest rates, many reputable banks and credit unions are now offering certificates of deposit with impressive rates above 4%. And in at least two cases, we\u2019re seeing CDs at 6%. But these have some big catches that mean you may be far better off with a high-yield savings account (some are paying 4.5% or more) or high-paying CD with less red tape.<\/p>\n\n\n\n

Security Plus Federal Credit Union offers an 11-month, 6% APY CD with\u00a0a\u00a0<\/a>minimum $1,000 deposit and maximum $50,000 deposit to Baltimore City residents. Meanwhile, Frontwave Credit Union offers 6% on\u00a0an\u00a018-month CD for residents of Riverside, San Bernardino and San Diego Counties, California who can pony up a minimum deposit of $1,000.\u00a0\u201cThese 6% CDs are primarily local deals, not everyone in the nation will be able to be eligible to join these credit unions,\u201d says Ken Tumin, founder and editor of DepositAccounts.com. Indeed,<\/p>\n\n\n\n

\u201cOne more thing to note is that these 5% to 6% CDs will likely be short-term CDs with a maturity length of 18 months or shorter. This is a similar situation that we see with Treasury yields which is due to expectations that rates will fall in 2024 and 2025. If those expectations change, we could see 5% long-term CDs,\u201d says Tumin.\u00a0<\/p>\n\n\n\n

Sigh, you might be saying \u2014 that 6% isn\u2019t in my future. But the good news there is that it may soon be. Morgan Stanley analysts predict that rates on CDs could reach 5.5% later this year, as reported\u00a0by\u00a0CNBC. \u201cWe saw a reacceleration of CD rate increases over the past two weeks, likely reflecting the higher probability that bank management teams are now assigning to a higher-for-longer rate environment,\u201d Betsy Graseck, managing director at Morgan Stanley, told the publication.\u00a0<\/p>\n\n\n\n

Other pros think that rate is likely too. \u201cOn a nationally-available basis, we\u2019ve got a good shot at seeing 5.5% on a 1-year CD or a 6-month CD between now and summer. An online bank, a community bank or a credit union would be the most likely candidates,\u201d says Greg McBride, chief financial analyst at Bankrate.<\/p>\n\n\n\n

If you\u2019re looking for a safe place to park some cash and you\u2019re amenable to having your money tied up for some time, a CD can be a lucrative way to earn interest. To qualify for a 5.5% rate on a CD, Chanelle Bessette, banking specialist at NerdWallet, says, consumers should make sure they\u2019ve done their research to find the best interest rate that\u2019s available to them as well as a term length that matches the timeline of their financial goals. \u201cYou can usually open a CD online directly with a bank or credit union but make sure you can meet the minimum opening deposit requirement for the CD you want and if you\u2019re looking to open a CD with a credit union, check to make sure you qualify for that credit union\u2019s membership,\u201d says Bessette.<\/p>\n\n\n\n

Another thing to note is that to obtain these 5%-plus CDs, you\u2019ll likely have to open new online accounts. \u201cThere may be a few local credit unions offering 5% or 6% and in those cases, you may be able to open them at a brick-and-mortar branch,\u201d says Tumin.<\/p>\n\n\n\n

That said, McBride suggests that being a credit union member and actively shopping around among the top-yielding, nationally available accounts will increase your odds of finding the best returns and being able to take advantage of them. \u201cIf CD yields reach 5.5%, they may not last long so be prepared to lock it in quickly when the time comes,\u201d says McBride.<\/p>\n","protected":false},"excerpt":{"rendered":"

Updated: March 6, 2023 at 6:27 a.m. ET\u00a0 Alisa Wolfson Many high-yield savings accounts and CDs are paying more than they have in about 15 years. Thanks to rapidly rising interest rates, many reputable banks and credit unions are now offering certificates of deposit with impressive rates above 4%. And in at least two cases,…<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"_links":{"self":[{"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=\/wp\/v2\/posts\/1027"}],"collection":[{"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=1027"}],"version-history":[{"count":1,"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=\/wp\/v2\/posts\/1027\/revisions"}],"predecessor-version":[{"id":1028,"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=\/wp\/v2\/posts\/1027\/revisions\/1028"}],"wp:attachment":[{"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=1027"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=1027"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.goldiumportfolio.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=1027"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}