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Here Are Your Best CD Strategies As Rates Rise

Thursday, August 29, 2013 - 8:21 AM
Interest rates on the 10-year U.S. Treasury note have soared above 2.8% after hitting a low of less than 2% in the spring, symbolizing a rate trend many expect to continue. So, finally, it’s a good time to put money into interest-bearing products such as certificates of deposit, right?

Here Are Your Best CD Strategies as Rates Rise | Save | CD | Get the best rates on mortgage, home equity loans, CD, money markets and checking accounts | BankingMyWay
ShorebreakShorebreak2,700 posts since
Apr 6, 2010
Rep Points: 14,636
1. Thursday, August 29, 2013 - 10:07 AM
Generally, my cd strategy is to go for the higher rate now regardless of length and not worry what rates may or may not be in a few years. Today, I can open a $10k 5 year cd at 2% that would yield about $1,050 over the 5 year length. A current 2 year cd is about 1.3% and would yield about $260 over 2 years. If I opened the 2 year cd in hopes that rates would be higher in 2 years, I would have to locate a 3 year cd when it matures at 2.55% in order to equal the $790 difference to match the yield that the 5 year is providing.

With my cd laddering, I always have a couple cds maturing every year so if rates were to move up in a few years I should have funds available to take advantage.
FARFAR108 posts since
Feb 26, 2013
Rep Points: 387
2. Thursday, August 29, 2013 - 1:07 PM
I usually go for the 5 year CD to get a rate I can use and it is almost like laddering because of the different years I purchase them.   I refuse to take any lower than 2% or go longer than 5 years and so far this has worked out with my financial plans so if rates go up, I can have some 5 yr CD at some point waiting to mature for the higher rate.  We all have to find specific methods which help us get the financial interest we particularly need. 
paoli2paoli21,406 posts since
Aug 10, 2011
Rep Points: 6,152