With the surprise Fed rate cut, savers should act fast to lock in CD rates
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“The Federal Open Market Committee has delivered monetary policy medicine investors were looking for to address concerns about the widening economic impacts related to the coronavirus outbreak,” says Mark Hamrick, Bankrate’s senior economic analyst and Washington bureau chief.
More rate declines for savers ahead
Prior to March, the Fed hadn’t made any rate changes in 2020.
It’s only a matter of time before banks and credit unions begin lowering their CD rates.
Lock in a good rate now
Today’s best 1-year CDs paid around 2 percent APY, as of last week. That’s around three times higher than the average 12-month CD yield, which is 0.67 percent APY, according to Bankrate’s weekly survey.
Savers on the fence about opening a CD, should consider opening a high-yield CD before rates fall further.
Laddering CDs — buying multiple CDs that mature at different intervals — could also be a good strategy. And given the uncertainty regarding how things could play out, it’s likely best to go with CDs with shorter-term maturities.
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