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June is officially in full swing. With the start of summer just a few weeks away, the weather outside is getting more and more welcoming for many. But June isn't just a good time to enjoy the outdoors with your kids or take a nice hike in the woods. It's also a good time to think about your savings and the moves you can make build on the money you have set asideespecially in the current unique climate marked by stubborn inflation and high interest rates.
This is where certificates of deposit (CD) can be valuable. The leading products in this category offer impressive performances, many of which are more than 5%. But, there is a trade-off. So that Take advantage of the returns that a CD offers, you must be willing to lock your money in the account for the entire term of the account. This could be from anywhere from a few months to a few years, depending on the account you choose. Of course, you can still access your money if you need to, but if you do it sooner, it might be penalized.
However, these accounts are valuable tools that, when used correctly, can have a significant impact on your financial well-being. Therefore, it is important to know what smart cd moves to make this june
Compare today's top CDs to earn more money now.
3 Smart CD Moves to Make This June
There are several moves you can make with a CD to increase the return on your savings as you plan for your financial future.
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If you don't already have a CD, you're missing out on the interest these accounts can offer. And thanks to the Federal Reserve the federal funds rate has been frozen at a 23-year highthis interest can be impressive.
But interest rates tend to move in cycles up and down. And, if the bull run we've experienced over the past couple of years is coming to an end, you may not have much longer to lock in today's high rates with a CD. So don't hesitate… start shopping now strong return rates.
Find out how strong your CD returns can be today.
Be ready to move in mid-month
Interest rates on consumer accounts, such as CDs, often depend on a benchmark rate known as the federal funds rate. This is the rate that the Federal Reserve controls, usually by raising it when inflation is too high and lowering it when inflation is too low.
This is an important consideration as we move into June. That's because the next inflation report is scheduled to be released on the morning of June 12, 2024, and the Federal Reserve will hold its Federal Open Market Committee (FOMC) meeting on June 11-12, 2024. .
It is important to note this inflation cooled in April – although not much. If the report due out on June 12, 2024 shows a cooling of inflation in May, the Fed could cut its federal funds rate. And, if that happens, consumer rates may also drop, which could mean today's high CD rates quickly become a thing of the past.
So be ready to move before June 12, 2024 as you expect more open your CD it could mean missing out on the opportunity to take advantage of today's high rates.
Use it as a tool to reach short-term savings goals
Many consider the fact that CDs require you to lock up your money during the term of the account a negative. But, this feature can also be positive. After all, if you have to pay a penalty to access your money early, you may be less likely to do so, which makes it more likely that you will succeed. your savings goals.
“CDs, like many things, should be part of a solid savings strategy, especially when you have money earmarked for expenses over a period of time,” says Aaron Cirksena, founder and CEO of the financial planning firm , MDRN Capital. It explains that the money you will need in the short term and three years from now should be invested to make more money for you. “However, you'd like to see the money earn more than a traditional savings account, so CDs are a great way to increase the yield on those savings while keeping the funds nice and safe.”
And that may be especially important this June. After all, we are about six months away from the holidays. So investing your vacation money into a six-month CD now can help you get a meaningful return on that money, while making sure it's available when you need it later this year.
Use a CD to help you reach your savings goals now.
The bottom line
CDs are versatile financial tools that have the potential to grow your income with your savings. Plus, there are some smart moves you should consider making with CDs this June. In particular, start shopping for one now and be ready to make a move in the middle of the month. With the upcoming inflation report and the Fed meeting, there's no telling how long today's high rates will be around. Also, consider using a CD to help you reach your vacation savings goals, as well as any other savings goals you may have. Compare today's top CDs to earn more from your savings now.
