Short-term CDs may offer top rates right now, but there are lots of 5-year CDs that are also worth considering.
. For starters, while the rates on these CDs are not as high as many of the current short-term CDs, the rates are still very competitive.
And, there's also the benefit of predictability and stability of returns. With a 5-year CD, you know exactly how much interest you will earn over the investment period, as the interest rate is locked in for the entire term. This makes it easier to plan for future financial goals and expenses, such as saving for a major purchase or retirement. If rates drop, you'll still earn the interest rate you started with for the rest of the term.
Plus, 5-year CDs are often considered a safer option compared to riskier investment vehicles like stocks or bonds, as they are insured by the Federal Deposit Insurance Corporation or the National Credit Union Administration , typically up to $250,000 per account holder per institution, ensuring the safety of your principal investment.While there are any number of CD terms to choose from, a 5-year CD can be a great way to maximize the returns on your savings right now.
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