Is a Certificate of Deposit the Right Choice for You? CDs in 2023

Is a Certificate of Deposit the Right Choice for You? CDs in 2023

Despite the significant impact of high-interest rates on the housing market, there’s a bright side: interest rates on savings accounts, including certificates of deposit (CDs), have risen. Since CDs now provide stronger returns compared to last year, it’s worth evaluating if this investment option aligns with your financial goals.

What Exactly is a Certificate of Deposit?

A CD is a special kind of savings account provided by credit unions and banks. It allows you to deposit a specific amount of money for a predetermined duration (the term) and receive a fixed, guaranteed interest rate in return. You invest your money for a set period, generally ranging from three months to five years, and upon completion of the term, you retrieve your initial deposit along with the earned interest. CDs can be opened at banks and credit unions, and while brokerages also offer CDs, the process is more complex and necessitates an investment account.

CDs are often regarded as one of the safest investment options, as they are insured by the FDIC or NCUA for up to $250,000. With this level of protection, you can be confident that your money is secure. However, it’s important to note that withdrawing your funds prematurely may result in a penalty.

Is a CD the Right Choice for Me?

The suitability of a CD as an investment option depends on your personal financial circumstances and objectives. CDs provide a reliable and protected method to increase your savings over a short-term period (note, CDs are not intended to be retirement plans), offering the key advantage of a fixed interest rate. However, it’s crucial to bear in mind that your funds are committed for the term’s duration.

Are you in search of a dependable and guaranteed strategy to increase your savings?

If so, investing in a Certificate of Deposit could be a viable option for you. With the Federal Reserve hiking up interest rates, the rates on CDs are currently quite attractive, presenting an excellent opportunity for you to maximize your savings. Here’s why a CD might be a good fit for you:

  1. Security: CDs are widely recognized as very safe investments since they are insured by the FDIC or NCUA up to $250,000.
  2. Stable Interest Rates: The moment you open a CD, you secure a particular rate, giving you a clear idea of the returns you’ll reap at the end of your CD term.
  3. Assured Returns: CDs provide a certain return on your investment, which can be beneficial for planning your next financial move.
  4. Attractive Interest Rates: With the Federal Reserve raising interest rates, CD rates are currently very attractive, allowing you to maximize your savings.

A Secure and Safe Option

Investing in a CD can be an excellent strategy to grow your savings in a safe and protected manner, particularly given the current attractive interest rates. However, before investing in a CD, consider your financial objectives and weigh the trade-off between higher interest rates and decreased liquidity. If you’re after a reliable and secure investment alternative and don’t require immediate access to your savings, a CD could be an ideal choice for you.

How Does a Certificate of Deposit Function?

A CD operates by securing a certain amount of money for a pre-determined duration at a fixed interest rate. When initiating a CD, you commit to leaving your funds in the account for a specific term, typically ranging from three months up to five years. The interest rate offered on our CDs surpasses that of our savings or checking accounts, making it a compelling option for enhancing your savings.

Upon the term’s conclusion, your funds, along with the accumulated interest, become accessible. Nevertheless, withdrawing your funds prematurely attracts a penalty, which may decrease your overall returns. Therefore, it’s vital to assess your liquidity needs throughout the term before investing in a CD.

When is the Optimal Time to invest in a CD?

Every financial investment should be evaluated on a case-by-case basis and aligned with the individual’s financial objectives. Nevertheless, the prevailing interest rates enable us to offer CDs with highly attractive returns, making it an opportune moment for those interested in CD investments.

If you are in search of a safe, secure, and assured method to increase your savings, and are comfortable with your funds being secured for a selected term, then the present moment is an excellent time to start a CD. With the Federal Reserve escalating interest rates, CD rates are currently quite high, offering you the chance to maximize your savings more than you could with CDs in the past years.

However, it’s crucial to evaluate your financial objectives and the balance between higher interest rates and reduced liquidity before investing in a CD. For instance, if you’re contemplating taking out a personal loan, a CD may not be the most suitable choice for you.

Contact our team of financial experts today to ensure that it aligns with your financial objectives and plans.


Latitude 32 Credit Union is dedicated to helping everyone reach their financial goals. Our team of expert staff is trained to handle a wide variety of needs for different situations. Becoming a member of our credit union is more than joining a financial institution. You are adding an entire financial support team to help you with all your current and future financial needs! Contact us today to learn more.

Latitude 32® Credit Union

1845 Sam Rittenberg Blvd.

Charleston, SC 29407

(843) 556-4809

[email protected]