Ask Jean: Are CDs Worth It Right Now, Or Should I Keep My Cash Liquid?

Saving money on ask jean are cds does not have to be complicated. We rounded up the essentials so you can spend less and skip the guesswork.

Key Takeaways

• A reader asks HerMoney CEO Jean Chatzky: "Are certificates of deposit (CDs) worth it right now?" Q: Today’s question comes from Paula.
• She writes: “Are CDs worth it right now, or should I keep my cash liquid?” A: It depends.
• The interest you earn via certificates of deposit (CDs) can be worth it if you know you won’t need the money for the full term.  Start...

A reader asks HerMoney CEO Jean Chatzky: "Are certificates of deposit (CDs) worth it right now?"

Q: Today’s question comes from Paula. She writes: “Are CDs worth it right now, or should I keep my cash liquid?”

A: It depends. The interest you earn via certificates of deposit (CDs) can be worth it if you know you won’t need the money for the full term. 

Start by considering what you need the cash for. Jamie Bosse, a CFP with CGN Advisors and author of “Money Boss Mom,” suggests her clients think of their finances in terms of buckets - including a cash “bucket.”

Your cash bucket should include enough for an emergency fund, plus cash you’ll need in the next year or two for vacations, home projects, etc. The funds in your cash bucket should earn interest, whether through a high-yield savings account (HYSA), a money market account, or a CD. 

For money you might need on a whim, a HYSA is your best bet. But if there’s cash you can leave untouched for a set period, a CD could be the way to go. “Where a CD might make sense is if you have some money saved up for something you plan to purchase in 12 months. In that case, having a 12-month CD is fine because you know you won’t need it until then,” shares Bosse. 

Right now, the best CD rates are over 4% - but heads up. With the Fed expected to announce another rate cut this week, those rates could slip. If locking in a CD feels right for you, it is better to do so sooner rather than later.

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Final Thoughts

The bottom line: a little research on ask jean are cds goes a long way. Compare your options, watch for seasonal offers, and never pay full price when a better deal is one click away.

Originally published at savingswitch.com.