2022-11-24 16:00:33

Opening a CD Now That Rates Are Higher? You May Want to Take This Approach

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By The Motley Fool

Image source: Getty Images

For years on end, putting money into a savings account meant collecting such minimal interest it was barely worth it. And while CDs (certificates of deposit) normally pay higher interest than savings accounts, their rates were stuck in stingy territory for years, too.

But over the past number of months, the Federal Reserve has been implementing interest rate hikes in an effort to slow the pace of inflation. That's bad news for consumers on one hand, because it's led to an uptick in interest rates across a range of borrowing products, from auto loans to personal loans to credit cards.

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But higher interest rates can spell good news for people with money to put in the bank. Not only are savings account rates up right now, but CDs are offering some of the best rates consumers have seen in years.

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