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Short-term investing in a time when inflation is on the rise and interest rates could change requires nimble decisions that involve a basic understanding of both the economy and the multiple investment products available to you. Go-to strategies you’ve had in the past may not have the same appeal now that there’s some uncertainty about where the market is headed in the next five or six months.
Certificates of deposit (CD) accounts provide a secure way to earn interest during times like this, offering a fixed rate of return that, at the moment, outpaces inflation. While CDs are relatively simple — deposit, earn interest until maturity, then withdraw your money — they require strategic thinking about term length.
CDs typically offer terms that range from just a few months to a few years. A 6-month CD provides key benefits that make it a great term choice right now.
See what 6-month CD rate you could secure here.
Why a 6-month CD is worth opening now
Here’s why a 6-month CD could be worth opening now, in the evolving economic climate of early 2025:
Rates are still high
Over the past few years, CD rates have climbed as high as 6% to 7%. Those rates are no longer available, but the top CDs still offer annual percentage yield (APY) above 4%. While that rate seems low compared to recent highs, context matters. Interest rates on many CDs just a few years ago barely broke the 1% mark. But right now you can still get a 6-month CD with a rate around 4.50%. If you have money in a savings account that’s earning less than that, simply moving money from your savings account to a 6-month CD can improve your returns significantly.
Rates could fall later this year
The general consensus among economic experts is that the Federal Reserve will lower rates later this year. Generally speaking, APYs for products like CDs decrease when the Fed decreases its benchmark rate. While experts agree rates will likely go down by 2026, it’s hard to say when that will actually happen.
A 6-month CD removes some of that rate uncertainty from your investment decision because its APY and term are fixed. So, if the Fed chooses to lower rates in the next few months, your CD returns won’t change even if the APY for new CD accounts drops.
You have a big expense coming at the end of the summer
If you were to open a CD today, your account would mature near September. That will allow you to earn a high return while still maintaining flexibility as you’ll have your money (plus interest) available again relatively soon. This can then help pay for expenses you’re planning to have later in 2025.
“If you are saving for an event in the near future — say a car purchase, house down payment, or a wedding — a 6-month CD is a smart choice,” says Mary Grace Roske, head of marketing at CD marketplace CDValet.
Generate extra earnings with today’s top CD rates.
The bottom line
Now is good time to open a 6-month CD account. With interest rates on pause, CD APYs remain at elevated levels. Those high rates will provide steady returns over the next six months amid a belief that interest rates will drop by the end of the summer. Additionally, the returns you earn from your short-term CD can help offset the cost of any big expenses you are expecting to have later this year.
If you’re hesitant to open a CD right now because it’s your first time doing so, Dr. Miranda Reiter, an assistant professor of personal financial planning at Texas Tech University, says a 6-month CD is a good starting point.
“Regardless of age or wealth status, 6-month CDs can be a good entry point for someone who has never owned a CD but would like to try it out,” Reiter says. “It is a short enough term to not feel like the money is locked in for too long.”
