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To Buy or Not to Buy: A Guide to Purchasing Certificate of Deposits in Today’s Climate

To Buy or Not to Buy: A Guide to Purchasing Certificate of Deposits in Today’s Climate

June 20, 2023

Certificate of Deposits (CDs) are a popular investment option for those looking to earn a guaranteed return on their savings. With interest rates playing a significant role in the value of this investment product, you might be wondering whether now is the right time to put your money into a CD.


Let’s talk about interest rates.

Right now, interest rates are at a relatively high level; this potential stability in the market may make CDs more attractive. If you are planning to invest in CDs for the next year or a year and a half, now may be an excellent time to do so.

Creating a CD ladder

Creating a CD ladder is an option to consider if you are looking to invest in CDs. This investment strategy involves buying a new CD with staggering maturity dates, which will become available for withdrawal once the initial maturity periods of the CDs have passed. By implementing this investment strategy, you will be able to potentially lock in higher rates and also keep your money accessible throughout the year after the investment has matured.

Locking in rates

CDs lock in a specific interest rate for a set period, typically six months to five years. This means that for the duration of the term, you will earn that fixed interest rate, irrespective of the market changes during the period. In a time when interest rates are low, CDs provide a sense of security that your savings will not be compromised.

What type of CD is right for you?

Do you want a short-term investment with better rates or a long-term investment with generally more significant yields? It's also important to keep in mind the consequences of early withdrawal. Typically, CDs come with a penalty for early withdrawal, which could impact your savings goals and financial planning.

It’s also important to consider the frequency of the interest payouts. Some CDs offer monthly payouts while others offer quarterly or annual payouts. Think about when you will need the funds and opt for an investment vehicle that aligns with your future financial plans.


Investing in a certificate of deposit can be a viable investment option; however, it’s important to evaluate your goals and timelines before deciding. This is when speaking with a financial advisor could be helpful. By looking at your long- and short-term goals they can help you understand your options so you can make the decision that’s right specifically for you.




Bank CDs are insured up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) and offer a fixed rate of return, whereas securities are not FDIC insured and both their principal and yield may fluctuate with changes in the market conditions.