Still, many other investors predict that the U.S.

Movements in the bond market indicate that some investors expect a recession-a scenario that would require the Fed to cut rates steeply in order to stimulate economic growth. While more rate increases are always possible, most Wall Street experts say the Fed is more likely gearing up for cuts-and that CD rates will in turn come down, too.īut exactly when the Fed will cut rates, and by how much, isn’t clear.

The Federal Reserve’s benchmark federal-funds rate, which closely influences CD rates, is now at a range of between 5.25% and 5.5% following 11 rate increases since March 2022, all aimed at bringing down inflation. Here’s what you need to know about where interest rates are headed in 2024, and where to snag rates on CDs higher than 5%. “It’s a really timely opportunity to invest.” “They’re fantastic rates and something we haven’t seen for a while,” says Lili Vasileff, a financial planner based in Greenwich, Conn.

Buying CDs now would mean locking in high rates before they fall. The same is true of other places investors like to stash cash, such as savings accounts and money-market funds.īut there’s good news: Unlike most savings vehicles, CDs allow you to capture an interest rate for several months or years, depending on its term length. Now that the inflation rate has come down, many investing pros see two possible outcomes for interest rates in 2024: one in which the Fed has little choice but to cut rates steeply, and another in which the Fed can cut rates modestly.Įither scenario would eventually result in CD rates decreasing, since rates on CDs tend to quickly follow Fed moves. As the Fed hiked rates over the past 20 months to tamp down soaring prices for consumer goods, CDs became an attractive place to place short-term savings. Interest rates that banks pay on certificates of deposit are closely tied to short-term interest rates set by the Federal Reserve. But thanks to current economic conditions-including an easing of inflation-experts say those high rates likely won’t last and that now’s the time to lock them in.

Savers have been enjoying the best rates on CDs in years.

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