5 smart CD moves to make in January

Certificate of Deposit (CD) interest rates have been falling in recent months, but many savers are still taking advantage of the current high interest rate environment by opening a CD account. CDs are a popular option because they are a low-risk investment that provides predictable returns. And CD accounts tend to earn higher rates than traditional or even high-interest savings accounts.

If you’re considering opening a certificate of deposit account in 2025, there are some moves you might want to make first. Below we look at five steps you can take to make the most of today CD account interest.

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5 smart CD moves to make in January, according to experts

Here are five smart — and timely — CD account moves savers should consider this month:

Shop around for the highest prices

If you’re considering putting money into a CD, an important first step you can take is to shop around for the best CD terms and rates. National CD prices tend to be low, so comparing your options will help you secure the best CD rates.

“Interest rates can vary significantly between banks and credit unions, so it’s important to compare offers to find the most competitive rates,” says Jake Falcon, CEO of Falcon Wealth Advisors.

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Loading your CDs

“With interest rates that fluctuate frequently, you should consider CD laddering to balance liquidity with future growth,” advises Chikako Tyler, CFO of California Bank and Trust. CD ladder involves opening several CD types with different expiry dates.

Once one CD has expired, you can access the funds and either withdraw them or reinvest them in another account. “It allows you to take advantage of higher rates for long-term CDs while still having access to funds from short-term CDs as they mature,” explains Falcon.

Be aware of FDIC limits

One of the reasons CDs are so safe is that they are FDIC insured – the FDIC insures up to $250,000 per deposit per bank. If you’re putting large amounts of money into a CD, Falcon says it’s important to be aware of FDIC limits. “You don’t want to overexpose yourself to a single bank,” he cautions.

Pay attention to the economic outlook

Continue to pay attention to the economic outlook and continue to monitor rate changes in the CD account. “While it’s impossible to predict the future, staying informed can help you avoid a mistake,” explains Falcon. “If interest rates are expected to rise, you can choose shorter CDs so you can reinvest at higher rates when they expire. Conversely, if interest rates are expected to fall, locking in a longer-term CD at a higher rate can be beneficial.”

Have a plan for CD maturity

You should have a plan for what you want to do with your CDs when they reach maturity. “First, review the terms of your CD and understand the grace period, which is the time frame you have to decide what to do with the matured funds,” says Falcon. “During this period, you can withdraw the money, renew the CD or transfer the money to another account.”

Most CDs automatically renew when they reach maturity if you don’t take any action grace periodbut DeLonde advises against this. However, if you let it renew automatically, it may do so at a new, lower rate.

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Bottom line

“If liquidity or diversification is a priority, you may want to reassess whether there is merit in reallocating your funds to a high-yield savings account, money market account or CD investment,” says Tyler. “At the end of the day, it’s about doing what’s best for your goals, whether it’s long-term or short-term.”