Nate Willardson, CFP®, Managing Partner at Currents Wealth Strategies, was recently quoted in MarketWatch on the topic of CD rates and retirement planning.
With some CDs still offering APYs of 4.5% and higher, Nate shares two important things to consider before locking in your money:
On interest rates: “When you invest in a CD, you’re taking on reinvestment risk. If you expect rates to rise, a shorter-duration CD makes more sense so you can reinvest at higher future rates. If you expect rates to fall, locking in today’s higher rate for a longer duration is the smart move.”
On choosing the right bank: “Just like a bond, a CD is only as good as the bank behind it. Before you open a CD, look up the bank’s credit rating and take a look at their financials. It’s better to be safe than sorry.”
