Here's Why September Could Be the Smartest Month to Open a CD

Anyone with money in the bank, listen up: The Federal Reserve recently announced its first rate cut in nine months, and it has projected a drop in interest rates through 2027 and beyond. That means today's strong interest rates on high-yield savings accounts, for example, will soon be a thing of the past.

There is one smart way to keep raking in interest, though: Locking your money in a certificate of deposit (CD), the best of which are still offering APYs of 4.00% or higher now.

Those rates will soon disappear too, though. In fact, they're already on the decline. Here's how to lock in a strong CD rate while you still can.

What is a CD, and how do I open one?

Put simply, a CD is a type of savings account where you deposit your money for a set period, then earn a fixed interest rate in return.

For example, let's say you put $10,000 in a 1-year CD that earns 4.00% APY. That means when your CD matures after the full year, you'll get your money back, plus 4.00% in interest -- $10,400.

The catch? You have to lock your money in the CD for the full term, or you'll be hit with an early withdrawal penalty. With just a little discipline, though, CDs can be a great way to earn interest, even once rates have fallen off.

Here's how to open a CD today:

• Decide on a term length: Shorter terms (3-12 months) offer you quicker access to your cash, while longer terms (2-5 years) have a longer guaranteed rate of return.
• Find the best rate: Online banks usually offer the highest APYs.
• Fund your account: Move your cash from an existing account to your new CD.
• Be patient -- don't touch your money: Most CDs charge a penalty for early withdrawals.
• Roll it over, or take the money and run: Once your CD matures, you can either withdraw your money or move it into another CD and do it all again.

Sound easy enough? See our full list of the best CDs and lock in a high rate today while you still can.

Should I open a CD now?

If you're ever going to open a CD, now's the time to do it. By opening one today, you can keep earning a strong return over the next few months or years, even if rates plummet.

They're a great choice for you if:

• You're saving for a short- to medium-term goal
• You've already built up an emergency fund in your savings account
• You're cool with locking up your money in exchange for a guaranteed return

Ready to get started? Check out our full list of the best CDs available now to lock in your high APY today.