Should You Open a 6-Month CD Before Interest Rates Start to Drop?

The clock is ticking. The next Federal Reserve meeting concludes on Sept. 17, and most experts expect a rate cut to be announced at that time. For savers, that's bad news: High-yield savings accounts and certificates of deposit rates will likely fall right along with it.

That's why a short-term CD could be one of the smartest moves you make this month. It lets you lock in today's higher rates before they disappear, while still keeping your money available in the not-too-distant future.

Why a 6-month CD works right now

Normally, CDs make the most sense when you want to lock in money for the long haul. But with the Fed on the verge of cutting rates, a short-term CD gives you the best of both worlds:

• You guarantee yourself today's higher APY for the next six months.
• When the CD matures, you can reassess where rates stand and either reinvest or pivot.

It's like pressing pause while everyone else watches their yields fall. Check out the best CD rates available now so you can breathe easy for the next six months.

How much difference does it make?

Say you've got $10,000 set aside. If you lock it into a 6-month CD at 4.25% APY, you'll earn about $212 in interest by the time it matures. If you leave that same $10,000 in a savings account that drops to 3.50% after Fed cuts, you'd earn closer to $175 over the same period.

That's not life-changing money, but remember, this is just six months. And on larger balances, or if you keep reinvesting, the gap grows fast.

A bridge strategy

A 6-month CD is also a great "bridge" if you're not ready to commit to longer terms. Rates might still be attractive six months from now, or you might want to start building a CD ladder at that point. Either way, you'll have preserved some extra yield in the meantime instead of watching it vanish.

What to watch for

Not every CD is created equal. Look for:

• APY above 4.00% (still available at many online banks in September)
• Low minimum deposits so you can start without a huge balance
• FDIC insurance to make sure your money is safe

And don't forget: once the Fed makes its move on Sept. 17, banks could cut CD offers almost overnight.

The takeaway

If you've been on the fence, a 6-month CD is a low-risk way to lock in today's top rates before the Fed pulls them down. You'll get a guaranteed return, a short commitment, and the flexibility to adjust when the CD matures.

Check today's best CD rates before Sept. 17 and grab a 6-month term while yields above 4.00% are still available. When the CD matures, you can reassess where rates stand and either reinvest or pivot.