Forget CDs, Even With Rates Over 4%. Here's Where I'd Put My Money Now
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CDs feel like the easy choice right now with 4% guaranteed returns. But locking up your money for a year or more while the financial world shifts around you isn't always the smartest move.
Here's how to start taking over your financial life.
1. Pay down high-interest debt first
Before earning 4%, stop losing 20%.
If you're carrying credit card balances, paying them down is the best investment you can make. That's a guaranteed return, and it frees up future cash flow you can actually enjoy. Not to mention it more than cancels out any perks you might earn for using one of the best rewards cards on the market.
Think of it this way: If a card charges 22% APR, paying it off is like earning a 22% return with zero risk. No CD can touch that, and having no credit card debt is essential to your financial wellbeing.
Pro tip: Some of the best balance transfer credit cards can give you almost two years to pay down debt without paying interest.
2. Keep your savings liquid and earning
High-yield savings accounts are still paying more than 4.00% APY right now. You get security, easy access to your money, and rates that beat many CDs without locking your cash away.
That flexibility matters. If the Fed cuts rates again before the end of the year, or even next year, you can move your money to a better spot instead of watching it sit idle.
Most banks come with no monthly fees -- you can compare the best high-yield savings accounts here.
3. Think long term with retirement savings
Once your short-term money is handled, start focusing on real growth.
Contributing to a Roth IRA or 401(k) can deliver much higher long-term returns than any fixed-rate product. The market has its swings, but history favors investors who stay consistent.
Even small automatic deposits add up over time. That can be the difference between having financial freedom in retirement, or looking for part-time work. Start investing in your future self today.
Our Research Expert
Jake FitzGerald is a full-time Editorial Strategist and Personal Finance Writer at Motley Fool Money, leading content production and distribution while also writing about credit cards, bank accounts, and other financial products. He has more than a decade of experience editing and shaping financial content to give readers clear, trustworthy money advice. His work focuses on delivering practical insights that empower people to make smarter financial decisions. Off the clock, he’s a fan of college football tailgates and still loyal to his favorite putter -- despite what his short game suggests.