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Lock In Your Rate: Why a 72-Month CD Might Be a Smart Move Now

Lock In Your Rate: Why a 72-Month CD Might Be a Smart Move Now

As interest rates hover at appealing highs, many people are jumping to open Certificates of Deposit (CDs) before the Federal Reserve potentially lowers rates later this year. While 12-month or shorter-term CDs are currently offering the most attractive rates, considering a 72-month CD could be a strategic decision for specific financial goals. Although not every bank offers a 72-month CD, and the interest rates may not be as high as shorter-term options, the longer-term CD provides a guaranteed rate over six years, which can be particularly advantageous in a potentially declining rate environment. For instance, First National Bank of America offers a 72-month CD with a 4.30% Annual Percentage Yield (APY). Despite the lower rate compared to a 12-month CD with a 5.05% APY, the 72-month CD ensures a stable return, safeguarding against future rate drops. This could be beneficial for those saving for long-term goals like a child's college education, where the stability of returns outweighs higher, short-term yields. By the time a $10,000 investment in a 72-month CD matures, it will accrue nearly $3,000 in interest, offering a predictable and secure growth option in uncertain economic times.

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