Right now, you can get a 0.50% interest rate with a regular savings account. And based on today's rates, you won't gain much by putting money into a CD as opposed to a regular savings account. Are CDs a much better deal than savings accounts?ĬDs tend to offer higher interest rates than savings accounts do. Doing so could mean stunting your savings' growth. But you shouldn't, for example, house your retirement savings in a CD, even if rates do rise.

If you have money you think you might need in a couple of years, it's not a poor choice to put it into a short-term CD. That's why you shouldn't rely on a CD as a decades-long savings tool. But is that much to write home about? Not really.

As 2022 progresses, we could see one-year CD rates inch closer to 1% or maybe even hit that mark. Right now, you might snag a rate of 0.70% on a one-year CD. However, the actions of the Fed tend to have an influence on consumer interest rates, so CD rates have the potential to rise.īut whether they rise significantly is another story. Rather, those are set by mortgage lenders, credit card issuers, and banks, respectively. Now just so there's no confusion, the Fed is not in charge of setting consumer interest rates, like mortgage rates, credit card rates, and CD rates. Since the Fed intends to raise its federal funds rate several times this year, consumer interest rates are expected to climb. The Federal Reserve recently announced its first of several interest rate hikes of the year. But this year, CD rates could rise - albeit modestly - for one big reason. In recent years, CDs have been paying really low rates, making them a less appealing option. If you cash out your CD before it comes due, you could be charged a penalty fee equal to several months of interest. That time frame could be six months, one year, or longer. The downside, though, is that they require you to lock your money away for a preset period of time.

The upside of CDs is that they tend to pay higher interest rates than savings accounts.

Cd interest rates forecast