By Kelly Ernst, CBS News featuring Brian Spinelli, CFP®, AIF®Co-Chief Investment Officer

Should I open a CD now or wait?

If you’re looking for a safe and reliable way to earn money while keeping your savings secure, a certificate of deposit (CD) could be the perfect solution for you.

CDs are low-risk investments that often have higher interest rates than savings accounts (including some high-yield accounts). They also provide the same federal protections savings accounts do ($250,000 per account per institution should the bank fail).

That said, there is an element of timing involved when it comes to opening a CD. Since your rate is locked in when you open the CD, current interest rates play a big role in this timing — but rates are not the only factor to consider. There are several things to keep in mind when it comes to determining if you should open a CD now.

Should I open a CD now or wait?

Here’s what you should consider when deciding whether to open a CD now.

What are current interest rates?

CD rates are set when you open the account, so if CD interest rates are high, it’s worth opening a CD to take advantage of them. Should overall rates go down in the future, your CD’s rate will stay in place for the entirety of the term, allowing you to earn maximum interest.

“Savers should be aware of where the Fed has set rates simply to know why their CDs… are paying a certain level of interest,” says Brian Spinelli, CFP, AIF, Co-CIO at Halbert Hargrove. “I think the important thing to remember is that those rates may not always be there to stay in perpetuity.”

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