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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
4
ShorebreakShorebreak2,614 posts since
Apr 6, 2010
Rep Points: 14,178
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.
8
FARFAR106 posts since
Feb 26, 2013
Rep Points: 381
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. 
2
paoli2paoli21,372 posts since
Aug 10, 2011
Rep Points: 6,011
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