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If you opened a certificate of deposit (CD) account in late 2022 or sometime in 2023 or 2024, chances are you’ll have blocked a interest rate. With rates on these accounts exponentially higher than they had been in 2020 and 2021, savers were able to rely on these returns to offset the burden of inflation and higher borrowing costs.
But the economy that savers face heading into 2025 is very different from what many experienced when they opened their CDs in recent years. This means that those with an account set up mature in the coming weeks or months they should start thinking about their plans for these funds now, rather than potentially to roll in an account that pays less. Fortunately, there are still attractive alternatives for savers to investigate now. We’ll break down three of them below.
Get started by seeing what kind of interest you could lock in with a long-term CD here now.
Where you should move your money after your CD account matures
While every saver’s financial circumstances are different, the following three accounts are worth exploring before your current one Maturity date of the CD:
full length CD
Full-length CDs, which have terms maturing in 18 months or more, they still have competitive interest rates, although not as high as some short-term CDs. With a long-term CD, you can lock in a rate of around 4.50% now and keep it for years to come. This fixed rate will remain static even if the broader interest rate climate cools during its term. However, it’s critical to only deposit an amount that you can afford to keep locked up for the full term of the CD. If you deposit too much money, you may have to pay one penalty for early withdrawal to reopen the account. That said, this is a safe and reliable way to continue earning high rates for several years.
Get started with a long-term CD online today.
High yield savings accounts
If you buy and consider one online bankyou may be able to find one high yield savings account with one interest rate even higher than that linked to some of the best CDs. By moving your funds into one of these accounts, you won’t have to worry about any early withdrawal penalties as it works just like a traditional savings account, albeit with that higher interest rate tall However, the fees for these accounts are variable and subject to rise or fall as the interest rate climate evolves. To get the most out of the account, savers need to open one quickly, while returns are still high.
Start earning more money with a high-yield savings account now.
Money market accounts
What if you want the flexibility and high interest rates that come with a high-yield savings account and the ability to do other things like write checks and pay bills? Then a money market account can be a smart place for your maturing CD funds. These accounts, at first glance, act like other savings accounts, but have higher fees than a traditional savings account, for example, which has an average rate of just 0.43%. However, these account types require a minimum balance, but if you’re used to leaving your funds untouched in a CD account, it could be a perfect transition.
The bottom line
Long-term CDs, high-yield savings accounts, and money market accounts are all viable alternatives worth exploring before your CD account’s due date. However, it’s critical to explore these options now, before your account expires. You will have a limit grace period to move these funds before they are automatically transferred, at which point you may have to pay the penalty to regain access. So start researching these options now and be ready to move your current CD funds to one or more of them when your account finally matures.