Even though the Federal Reserve has begun cutting interest rates, it's still possible to lock in a competitive rate on a certificate of deposit.
That means you could earn $400 to $500 on a $10,000 deposit in one year with a CD, compared with just $57 with a savings account.
That's about the best interest rate you can find without investing the money, which carries a higher degree of risk.
However, with a CD, the trade-off for a good interest rate is that your money is locked in for a set term of several months or years.
"CDs are a great place for your cash if you don't need the money for a specific amount of time," says Jeremy Keil, a certified financial planner in Wisconsin.
Persons:
Jeremy Keil
Organizations:
Federal Reserve
Locations:
Wisconsin