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Bank CD Market Timing


When should you lock into a long-term CD? Ideally, it's when interest rates have peaked. The problem is trying to predict those peaks. This article from Bankrate.com has some points to consider. One point is that longer term rates don't necessarily move in lock step with changes in short-term rates. The rates of 5-year CDs could peak long before the Fed stops their tightening cycle. If the market feels that inflation risk is being controlled, long term rates may decline. Instead of interest rate betting, the article recommends CD ladders as a way to even out the rate cycles.

Refer to my previous post about finding the best bank for CD ladders and to this post about how a CD add-to feature can help with laddering.