Back during the Great Recession, CDs took a massive hit in value and interest. This was because so many people either needed their money, or they wanted to remove their money from the certificate of deposit and put it into something else with climbing value (such as gold). Value for CDs started to decrease around 2010, and continued on this downward trend until 2014. Through around 2018, CDs maintained more or less of a steady pattern, increasing slowly. Once 2018 hit though, the value of CDs started to take off and now the value of CDs, while not at 2010 levels, are back to where they were around 2012. If CDs continue with this trajectory, offering two percent interest rates and more, you’ll see a larger influx of CD investors. If you’re interested in this kind of investment, here is what you need to know regarding the best CD buying strategies when rates go up.
Don’t Ignore What’s In Front Of You
It is almost impossible to perfectly forecast the absolute perfect time for a CD investment. However, rates are going up, which means it is a good time to invest in such a CD. You can put it into a shorter term CD if you’d like to wait some, but in general, with these kinds of investments, it is better to not just ignore what is going on and instead take advantage of a good thing while it’s here.
The CD Ladder
If you have different amounts and you’re not sure what you want to do, this is the way to go. Split up your investment into five different categories. Put the first category into a one-year CD, the second into a two-year CD, the third into a three-year, and so on. This way, you’ll increase your potential of hitting that interest rate sweet spot.
Consider Your CD Buying Rates
If you’re looking for a safe investment that doesn’t involve much in the way of risk, a CD is a viable option. With CDs ranging from three months to five years, there are different CDs you can consider. These are also fine investments when you want to gain more interest than you might with a traditional savings account. So whether you’re just dipping your toes into the world of investing or you want to diversify your portfolio, now is the time to move on CDs, as the rates are starting to increase.
To learn more about Heritage Bank’s CD options, click here.
Tom serves as the Financial Consultant for Heritage Bank. In partnership with LPL Financial Services, he assists individuals, families and business owners with all aspects of financial planning including retirement.
LPL Financial Consultant • 678-284-3302 • [email protected]