Related Articles
Are you saving money for a car, a down payment on a house, the vacation of a lifetime or any other large expense? If so, there’s a high probability that you’re facing a challenge. In today’s inflationary environment, the money you save has to earn a meaningful return. After all, if your return rate is any lower than the current inflation rate, your money is losing buying power. Fortunately, there are some alternatives that can outpace inflation right now.
“A CD is a good option if you’re saving for a specific goal, like a car or vacation,” explains Stacey Black, lead financial educator at BECU. That’s because many of today’s certificates of deposit (CDs) are offering returns that are well above the current rate of inflation. Moreover, you’ll agree to keep your money in the account for its entire term, likely making it easier to achieve your savings goals.
However, it’s important to note that not all CDs are equal. In fact, some offer returns that outpace inflation while others don’t. So, where can you open a CD that offers a higher return than the current 3.1% inflation rate? That’s what we’ll explore below.
Open a CD now to lock in today’s high returns.
15 CDs that outpace inflation right now
The good news is that the inflationary environment has ushered in higher interest rates on deposit accounts. So, you won’t have to look very far to find a CD that offers a return that’s higher than 3.1%. Here are 15 options with APYs over 5%:
Space Coast Credit Union – 5.61% APY: The minimum deposit to open this account is $500 and it has a one-year term. CIBC Bank – 5.51% APY: The minimum opening deposit requirement on this account is $1,000 and the term is one year.BMO Alto – 5.50% APY: This account comes with a six-month term and has no minimum opening deposit requirement.America First FCU – 5.50% APY: This account has a minimum opening deposit requirement of $500 and the term is three months.Popular Direct – 5.37% APY: The minimum opening deposit requirement on this account is $10,000 and the term is one year.Brio Direct – 5.35% APY: This account requires a minimum opening deposit of $500 and comes with a one-year term.CFG Community Bank – 5.35% APY: The minimum opening deposit requirement for this account is $500 and the term is one year.First Internet Bank of Indiana – 5.35% APY: This account comes with a one-year term and a $1,000 minimum opening deposit requirement.America First FCU – 5.30% APY: The minimum opening deposit requirement on this account is $500 and the term is six months.Quontic Bank – 5.30% APY: The minimum deposit required to open this account is $500 and the term is one year.Tab Bank – 5.27% APY: The minimum opening deposit requirement on this account is $1,000 and it comes with a one-year term.USAA Federal Savings Bank – 5.25% APY: The minimum deposit required to open this account is $1,000 and the term is six months.Marcus by Goldman Sachs – 5.25% APY: The minimum opening deposit requirement on this account is $500 and it comes with a 14-month term.BMO Alto – 5.15% APY: There’s no minimum deposit requirement on this account and it has a one-year term.Synchrony Bank – 5.15%: This account has no minimum opening deposit requirement and comes with a nine-month term.
Lock in returns that outpace inflation with a CD now.
The bottom line
It’s generally a wise idea to save money over time in order to accomplish your financial goals. However, it’s also important that your savings vehicle generates enough of a return to outpace inflation. If that’s not the case in your current savings set up, consider opening a CD to generate a positive inflation-adjusted return on your idle cash.
Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he’s not working, he enjoys time with his wife, two kids and two dogs.
