For Savers Who Hate Surprises, This Strategy Delivers
Secure a guaranteed return now and stop worrying about what the Fed does next.


The economy is changing, and it will likely impact savers. The July jobs report was not stellar, with only 73,000 jobs added. Moreover, the revisions to the May and June jobs reports resulted in a reduction of 258,000 jobs, showing a cooling job market. When this happens, one way the Federal Reserve can stimulate the economy and job growth is by lowering rates.
CME FedWatch projects a 92% chance of a quarter-point rate cut when the Fed meets in September. If this happens as projected, it will impact savings rates. When the Fed cuts rates, it also drops rates on all savings vehicles, from CDs to high-yield savings accounts.
With this in mind, if you're a saver who hates surprises, I have a tip for you. Doing this helps you earn guaranteed returns and lock in a high rate now before the Fed makes its next move.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.

Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
Lock in a high rate before rate cuts hit
CDs don't offer the ease of accessing your cash, like money market accounts or high-yield savings accounts. However, they do come with a feature that proves handy in situations like this: A fixed APY.
With a fixed APY, you won't have to worry about what the Fed does. Once you lock in your rate, it's the return you'll earn even if rate cuts happen.
Now is an excellent time to sign up for one, with rates above 4% for many accounts. Using this tool from Bankrate, you can shop and compare options fast:
Which CD term works best for me?
Your choice comes down to your savings goals and risk tolerance. If you have cash on hand and want to earn a high rate for years, our best 5-year CD rates are a wise option to consider.
For example, if you deposit $50,000 into a 5-year CD from Lafayette Federal Credit Union at 4.28%, you'll earn $11,655.97 in interest risk-free over the term.
If you’d rather see how inflation plays out before committing long-term, you might be more inclined to a short-term CD. These are beneficial if you want to see how prices play out for the next year, as you can move your money if inflation increases to the point where 4%+ returns are not netting you enough of a return.
This is where our best one-year CD rates come into play. Locking one in now ensures you receive a high rate that won't change if the Fed cuts rates.
Using the same deposit above of $50,000, if you sign up for a one-year CD with Colorado Federal Savings Bank at 4.30%, you'll earn $2,150 in interest that first year.
And, you have the option in a year to pivot to other investments that earn you more, especially if prices keep rising.
Things to keep in mind with this CD approach
CDs are a lock your money away and forget about it type of savings vehicle. If you need to access money before your term expires, you pay an early termination fee. Banks charge penalties based on your CD maturity. If you have a one-year CD, penalties range from three to six months of interest.
Meanwhile, for five-year CDs, penalties can creep as high as one year of interest earned. Therefore, make sure you can live without this money comfortably before you sign up.
Also, some banks will renew your CD once it reaches its maturity. Set a reminder on your phone a week before its maturity date, as it gives you more time to shop around to see where rates are and whether you want to try another savings vehicle.
Ultimately, CDs are a smart savings option if you want to lock in a high rate now and not worry about upcoming rate cuts. Not only will you receive a guaranteed return, but you will have peace of mind knowing your CD is outpacing inflation.
Related content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Sean is a veteran personal finance writer, with over 10 years of experience. He's written finance guides on insurance, savings, travel and more for CNET, Bankrate and GOBankingRates.
-
4 Career Moves to Make Now if You're Worried About a Recession
Worried about a recession? These steps to protect your job prospects will help you professionally whether a downturn develops or not.
-
How StoryCorps Works and How You Can Tell Your Story
StoryCorps has recorded conversations between thousands of people, and anyone can participate. National facilitator Alan Jinich explains how to share your story.
-
4 Career Moves to Make Now if You're Worried About a Recession
Worried about a recession? These steps to protect your job prospects will help you professionally whether a downturn develops or not.
-
How StoryCorps Works and How You Can Tell Your Story
StoryCorps has recorded conversations between thousands of people, and anyone can participate. National facilitator Alan Jinich explains how to share your story.
-
Vacation Couture: Why Wealthy Americans Are Flying to Europe to Save on Luxury
Tariffs are making high-end shopping in the U.S. pricier — so savvy travelers are heading overseas, where VAT refunds and favorable exchange rates can offset the extra cost.
-
Think Twice Before Getting a Credit Card Cash Advance
A credit card cash advance can be a quick solution when you need emergency help with money. But you'll pay for the convenience with high interest and fees.
-
5 Home Run Hotel Packages Every Baseball Fan Will Love
From Fenway to Yankee Stadium, these bundled hotel-and-baseball deals combine savings, perks and unforgettable fan experiences.
-
My First $1 Million: Retired Marketing Consultant, 74, Southern New Hampshire
Ever wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Amtrak Debuts High Speed Trains as Train Travel Enters a New Golden Age
Amtrak's new high-speed trains come with upgraded amenities, expanded schedules and more as rail travel demand surges.
-
I'm a Financial Adviser: Three Things You Will Wish You Did Before the Fed Cuts Interest Rates
With potential interest rate cuts on the horizon, you might want to lock in today's higher yields and consider adjusting your asset allocation.