Posted
on Monday, July 14, 2025
in
Financial Education
Boost Your Savings With a CD
Certificate of Deposit an Attractive Option in Today's Economic Climate
Today’s interest rate environment has strained consumers’ ability to secure an affordable loan. Whether it’s a mortgage, auto or another personal loan, the cost of borrowing has made it difficult for many consumers to achieve their financial goals. We want to raise awareness about one bank product that can give your savings a big boost when rates are high — certificates of deposit.
When interest rates are high, it’s possible to increase earnings by opening a CD. While it may not be an attractive time to take out a loan, a CD can help savings grow.
What to Know About CDs:
CDs are a great way to grow money you don’t need right away. A CD can offer a higher fixed interest rate for a set period of time, allowing your money to grow faster than if it was left in a savings account. The following is everything you need to know about CDs.
- Guaranteed rates — Fixed-rate CD products are one investment product that comes with very little risk. Although your money will be tied to the CD for a set period of time, the interest rate you secure won’t change based on market conditions or other factors.
- Length of term — The CD term offerings vary by bank. Typically, CDs will have a term anywhere between three months to five years.
- Short-term CDs — With a term of one year or less, short-term CDs offer more flexibility, because your money won’t be tied into the CD for very long. If needed before the CD matures, the penalty for withdrawing funds early can also be lower than with a longer-term CD.
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Longer-term CDs — The biggest advantage to a longer-term CD — a four- or five-year term — is typically higher interest rates. With the Federal Reserve weighing whether to reduce interest rates by the end of the year, now is a great time to invest in a longer-term CD that will provide a higher fixed interest rate for the term of the CD regardless of what the Federal Reserve does with interest rates.
More Information
To learn more about the benefits of a CD, visit our Certificate of Deposit (CD) page or give us a call!
These tips are provided by the Iowa Bankers Association
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