Money Management

Pumping too much cash into a CD could backfire on you. Here’s what could go wrong. [[{“value”:”

CDs have been a popular choice for savers this year due to their impressive rates. For much of 2024, it was easy enough to lock in a CD at 5%.

At this point, it’s harder to find 5% CDs. But CD rates are still pretty impressive, with many paying well over 4%. It’s not too late to jump on the CD bandwagon if you didn’t do so earlier in the year.

At the same time, you don’t want to make the mistake of putting too much money into a CD. Going overboard could actually cause you to miss better returns elsewhere.

Be careful with CDs

A CD is a great place to grow your money on a short-term basis. If you’re saving for a home and are aiming to buy one in 2027, now’s a good time to open a 12- or even 24-month CD.

But you should limit the amount of money you put into a CD to funds you expect to need in a few years. If you expect to hang onto the money for many years or even decades, you should probably invest it instead.

While you might still get close to 5% out of a CD today, you should know that over the past 50 years, the S&P 500 has rewarded investors with an average annual return of 10%. That 10% accounts for years when the market soared, but also, years when it clocked in losses.

This tells us that if you invest in a broad market index like the S&P 500 over a long period, you could make a good amount of money. If you put too much money into a CD, you might limit your returns.

Investing long-term money can make a big difference

Let’s say you’re planning to put $40,000 down on a home you’re planning to buy in 2027 because you’re in grad school until that point. And you have $45,000 in savings right now on top of what you need for emergency fund purposes. You might assume it makes sense to put that entire sum into a CD. But you’re better off limiting your CD to $40,000 and putting the remaining $5,000 into a stock portfolio.

If you earn a 10% yearly return on your $5,000, then in 25 years, it will be worth about $54,000. If you wait two years to invest your $5,000, it will only be worth about $45,000.

And yes, you’ll earn something on that $5,000 if you put it into a 24-month CD. But at 4.5%, you’re looking at $460. That doesn’t make up for the $9,000 difference between investing your $5,000 now vs. in two years from now.

Don’t go overboard

CDs are a good way to earn a little extra on your money in the near term. But when you put too much money into a CD, you limit the amount you can earn on your cash. Be careful when opening a CD today, because even though rates are still pretty high, they pale in comparison to the return you might get out of the stock market.

If you’re new to investing, click here for a list of the best stock brokers. You may want to try out a few different platforms to find the one you’re most comfortable with.

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With 500-plus options, trying new Kirkland products is easy. Keep reading to learn about four items one writer does not think are worth the money. [[{“value”:”

Costco’s famous Kirkland Signature is a fan favorite for a reason — there’s something for everyone. I’m a big fan of Kirkland Signature’s coffee, and my pups think it’s their birthday every time I add a little Kirkland canned dog food to the top of their meal. (They want me to tell you that the chicken and rice recipe is absolutely hideous, but they adore the turkey and pea stew.)

There’s plenty to like about Costco. I appreciate that my husband enjoys the warehouse enough to volunteer to shop alone. I especially like that we can leave a little extra money in our checking account each month simply by being savvy shoppers.

But with 500-plus Kirkland products, it’s natural that I’ve found some things I wouldn’t spend money on again. I’ll list out four of them here. And if you’re planning your own shopping trip soon, check out our curated list of the best credit cards to use at Costco.

1. Kirkland Signature Bath Tissue

Until recently, I didn’t realize how controversial my stance regarding Kirkland bath tissue is. People who love it really love it. Reddit is full of Costco members who say they would never use another brand. As for me, it’s a hard no.

I won’t bore you with the details, but suffice it to say I’ve learned that I’m allergic to Kirkland toilet paper. I suspect you’ll agree that no one wants to be allergic to toilet paper.

Because I value you as a reader, I’ll leave the subject there.

2. Kirkland Signature Seasonings

When we moved to Illinois two years ago, I brought approximately 75 jars of spices. It wasn’t until we unpacked that I checked the “best if used by” dates. I must have been lugging some of those spices around since Y2K.

For me, the issue is picking up more than I need when I’m at Costco. For example, I’ll think, “Oh, I only have half a jar of cinnamon left.” As I stroll down the spice aisle, I either buy too large a jar to use in my lifetime or pick up two smaller jars and “save one for later.” Spoiler alert: Saving spices typically means allowing them to lose their flavor before using them.

This is a very personal issue (well, not as personal as telling you that I’m allergic to a specific brand of toilet paper). Still, now that I’ve gotten rid of my outdated spices, I only buy a spice when I need it and pick up the smallest jar available at my local grocery store.

3. Kirkland Signature Platinum Performance Ultrashine

For someone so easily distracted, you may find it counterintuitive that I’m a clean freak. I never go to bed with a dish in the sink and can’t begin my day until everything is clean and organized (and I have a humongous mug of coffee in hand).

This brings me to Kirkland’s dish soap, Platinum Performance Ultrashine. Again, some people love it, but I need dish soap that does most of the work for me. I do not enjoy scrubbing a greasy skillet or cookie sheet with baked-on chocolate chips, and this dish soap does nothing to make my life easier.

At nearly six pounds, the product is roughly the size of a newborn baby, so I get the appeal — especially because it only costs $10. For an identical amount of Palmolive dish soap on Amazon, you’d pay over $25.

Still, I’ve tried alternatives but keep coming back to Dawn for tough dishes.

4. Kirkland Signature Ultra Clean HE Laundry Detergent Pacs, 152-count

Have you ever purchased new laundry pods only to learn they don’t completely disintegrate in your washing machine? They’re not only gross to pick out of the laundry but also make me wonder whether my clothes are clean. Like dish soap, I find myself returning to the same product I’ve used for decades.

Before sitting down to write this, I knew there would be opinions. A Kirkland Signature product I dislike may be someone else’s favorite. In fact, based on your preferences and habits, you may have an entirely different list of “not-so-great” products.

The good news is this: Even if you run across a handful of Kirkland Signature products you could do without, you have hundreds more to choose from, and Kirkland products are an excellent choice for keeping your budget under control.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Dana George has positions in Amazon. The Motley Fool has positions in and recommends Amazon and Costco Wholesale. The Motley Fool has a disclosure policy.

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Building a $500,000 nest egg may be more feasible than you’d think. Read on to see how to get there. [[{“value”:”

If you want to be able to enjoy retirement without being overwhelmed with financial worries, then you can’t rely on Social Security benefits alone. The typical retired worker today only collects about $23,000 a year.

And while the average monthly retirement benefit should increase over time in line with inflation, the point remains the same: Retiring on just Social Security will likely mean taking a huge pay cut and having to limit your spending later in life.

A better bet is to set yourself up with a nice amount of savings in the bank so you have that money on top of what Social Security pays you. And while there’s no single target number that guarantees long-term financial stability, a $500,000 nest egg puts you in a pretty great spot for retirement.

At first, you might think that saving $500,000 in your lifetime is virtually impossible. But you may be surprised at how easy it is to get there.

A goal that’s more attainable than you’d think

As of 2022, the median retirement savings balance among Americans aged 65 to 74 was $200,000, according to the Federal Reserve. So if you were to retire with $500,000, you’d have two and a half times more money than the typical older American today. And you may be able to reach $500,000 by saving just $200 a month.

Of course, if you’re on a tight budget, you might worry about coming up with $200 a month. But if you contribute to a traditional IRA, those $200 deposits will be tax-free, which could make them easier to swing. Check out our list of the best IRAs for retirement savings.

Making the numbers work

Let’s review the math to see how $200 a month might lead to $500,000 in savings. That $200 figure assumes two things:

You’re saving that much each month over a 35-year period.You’re investing your money at a 9% yearly return, which is a notch below the stock market’s average return over the past 50 years.

With these guidelines, saving $200 a month could lead to a nest egg worth about $518,000 — so actually, you’re a bit over the $500,000 mark, which is even better. And as far as the above requirements go, a 35-year savings window is more than reasonable, even if you don’t start saving as soon as you kick off your career. If you begin funding an IRA at age 30, you’re 35 years away from 65, which is a common retirement age.

And if you’re wondering how to get a 9% return out of your IRA, a good bet is to load up on S&P 500 ETFs, or exchange-traded funds. The S&P 500 index consists of the 500 largest publicly traded companies and is considered a measure of the stock market on a whole. So when we talk about 9% being a bit below the market’s average, we’re actually referring to the S&P 500’s performance over time.

Get ready to enjoy retirement to the fullest

A $500,000 nest egg could make your retirement pretty darn fantastic. And now that you know that it’s possible to get there by investing just $200 a month, you can work on finding ways to come up with that money.

You may have to spend a bit less on some of the things you love, or even boost your income with a side hustle if your paycheck is already taken up by your current budget. But saving $200 a month could spell the difference between enjoying retirement to the fullest and struggling financially. So it’s definitely worth making that effort.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has positions in Target. The Motley Fool has positions in and recommends Target. The Motley Fool has a disclosure policy.

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Costco has a very reasonable return policy with food. But you need to make sure you don’t push your luck. Here’s what you should know. [[{“value”:”

One of the perks of joining Costco is getting to take advantage of the warehouse club giant’s generous return policy. With few exceptions, you can bring purchases back to the store at any time and get a full refund. So if you buy a kids’ winter jacket your child doesn’t end up wearing, there’s no issue with returning it eight months later.

You may be surprised, though, to learn that Costco’s flexible return policy extends to partially eaten food. You’d think that the “you ate it, you bought it” rule would come into play, but Costco is more than willing to give people their money back for food items they’re not satisfied with. However, you need to follow the rules.

How to get refunded for partially eaten food at Costco

If you’re bringing food back to Costco because of a taste issue, the general rule is that you need to return 50% of it (or more) to get a refund. Say you buy a bakery cake whose flavor doesn’t sit well with you. If you eat a slice, realize it’s gross, and bring the rest of the cake back, you shouldn’t have an issue getting your money back. If you bring back half of the cake, you’re probably still OK.

But if you bring back a cake that’s 80% eaten, Costco’s staff is going to laugh at you and tell you to go away if you ask for a refund. Well, OK, they probably won’t do that. But they’re unlikely to give you your money back when it’s clear you’ve consumed the bulk of that cake.

Now, if you’re bringing food back due to a quality issue, you may be able to get away with returning less than 50% of it. For example, if you buy milk with a sell-by date of Oct. 30 and it spoils by Oct. 22, you may be able to get refunded even if you’ve finished, say, two-thirds of it. That’s because you should, in theory, be entitled to milk that lasts as long as the printed date.

But even in that case, you need to be reasonable. If there’s a quarter cup’s worth left, don’t go asking for a refund. Not only are you unlikely to get one, but too many returns of an unreasonable nature could put your account at risk of getting flagged. And that, in turn, could result in your membership being revoked.

Bring in the evidence

Another key rule to follow when returning partially eaten food to Costco is that you have to actually bring in the item in question, even if it smells or looks disgusting. To put it another way, Costco wants your moldy berries, chunky milk, and green-tinted bakery bread. So hold your nose and load those items into your trunk if you’re bringing them back for a refund.

The good news is that because Costco sells food that’s high in quality, issues with early spoilage are likely to be rare. But if you do end up dissatisfied with a food purchase, don’t hesitate to bring the item back.

Costco’s business model centers on customer satisfaction. And if you’re throwing out food, you’re not saving money, which goes against Costco’s value proposition.

If you want to maximize your Costco savings, know when and how to return food. And be savvy about the credit cards you shop with. Check out this list of credit cards that offer extra rewards at Costco so you can enjoy even more benefits as a member.

Top credit card to use at Costco (and everywhere else!)

We love versatile credit cards that offer huge rewards everywhere, including Costco! This card is a standout among America’s favorite credit cards because it offers perhaps the easiest $200 cash bonus you could ever earn and an unlimited 2% cash rewards on purchases, even when you shop at Costco.

Add on the competitive 0% interest period and it’s no wonder we awarded this card Best No Annual Fee Credit Card.

Click here to read our full review for free and apply before the $200 welcome bonus offer ends!

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.Maurie Backman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale. The Motley Fool has a disclosure policy.

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You may be tempted to lock in a CD before rates fall even more. But read on to see why you may end up regretting that decision. [[{“value”:”

CDs have been a popular investment in recent years for one big reason — rates have been sky-high. Even though it’s gotten harder to find 5% CDs following the Federal Reserve’s September interest rate cut, many CDs are still paying close to 5%.

But even though today’s CD rates remain impressive, you could run into trouble by opening one. Here are a few reasons opening a CD might backfire on you.

1. You might lose out on an investment opportunity

The idea of earning almost 5% on your money sounds nice, right? But you should know that the S&P 500’s average annual return over the past 50 years is 10%. And that accounts for periods when the index did well and periods when it didn’t.

If you have money you don’t expect to need for a good seven years or more, then investing it is probably a smarter move than opening a CD. You might snag a much higher return with a stock portfolio.

Say you have $10,000 to work with. Even if CDs somehow pay 4.5% a year over the next 20 years, which is highly unlikely, you’re looking at about $24,000 as your end result. With a stock portfolio paying you 10%, in 20 years, you’re looking at more like $67,000.

That’s a $43,000 difference. And it’s based on a long-term CD rate that’s probably not realistic. You’re likely going to lose out on more than $43,000 in this example if you choose CDs over a broad market index like the S&P 500.

If you’re new to investing, click here for a list of the best online brokerage accounts. That way, you can start growing your money ASAP.

2. You might choose the wrong term and get penalized for an early withdrawal

Most banks offer a variety of CD terms. Some offer a term as short as three months, and many offer a term as long as 60 months.

But choosing the wrong CD term puts you at risk of an early withdrawal penalty. And while the amount of that penalty is up to your bank, it could cost you a lot of money.

Say you open a 12-month CD thinking you’re OK to part with your money for that long. But what if you realize you need to repair your air conditioner next summer, when you still have three months before your CD matures? If you pull out the money, you risk a big penalty, making your CD less useful.

3. You may have to put off purchases that make your life better

Taking an early CD withdrawal penalty is annoying and costly, so you may be inclined to do whatever you can to avoid that. But even if you can leave your CD alone until it matures, doing so could negatively impact your quality of life.

Say you open a 12-month CD, and a few months later, your TV breaks. You could technically wait until your CD matures to take your money and buy a new one, since it’s possible to go without television for a while. But is that something you want to do? Probably not.

Similarly, you may be on a month-to-month lease. If a great apartment across town becomes available, you may want to jump on it. But if you can’t afford the cost of a move because your money is tied up in a CD, you could miss out on that opportunity.

Proceed with caution

None of this is to say that opening a CD right now is a mistake. But it’s important to be aware of the pitfalls you might face if you decide to put money into one.

So before you do, consider whether it pays to invest your money instead. And think carefully about your near-term expenses and wants.

If you’re not ready to invest your money, it could make sense to keep it in a savings account rather than commit to a CD. Savings accounts aren’t paying so much less than CDs right now.

And while your interest rate in a savings account isn’t guaranteed like CD rates are, you at least get the flexibility to withdraw your cash at any time without worrying about a penalty. Click here for our list of the top savings accounts and rates today.

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We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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High-yield savings accounts will pay eight or nine times more in interest than the national average. Find out what that means for your money. [[{“value”:”

Having $8,000 in savings is a solid achievement. It puts you ahead of many Americans who couldn’t cover a $1,000 emergency. Not only that, but your savings will also work for you by earning interest.

Depending on what top high-yield savings account you use, $8,000 in savings could generate over $400 a year in interest payments. The exact amount depends on what annual percentage yield (APY) your account pays.

Savings accounts are still paying high returns

You might have seen headlines about falling savings rates recently. Don’t let them put you off from opening a high-yield savings account. It’s true, the Fed’s rate cuts have had an impact on savings APYs. However, rate cutting is a gradual business and you can still earn solid yields from your savings today.

More important than the rate cuts is the knowledge that not all savings accounts are created equal. The average savings APY is 0.46%, according to the FDIC. If you’ve got money in a savings account that’s paying less than 1%, you are missing out on potential interest payments.

Learn more about which high-yield savings accounts will pay over 4.00% APY — nearly nine times more than the national average.

Here’s the difference a high-yield savings account can make:

When you’re comparing savings accounts, it is easy to look only at APYs. After all, you can earn hundreds of extra dollars by switching to a high-paying account. However, minimum deposit requirements and monthly fees matter as well. It’s also good to factor in how you want to bank — an online-only bank may not have all the features you need. For example, they lack in-person customer service.

Know how much you need in savings

When you think about how much interest you can earn on your savings, it’s natural to wonder whether you might earn even more by parking your money elsewhere. For example, by investing it in the stock market or locking it away in a CD.

But you need to have some money in savings before you invest or open a CD. It’s like unlocking levels on a computer game.

The common wisdom is to keep three to six months’ worth of expenses in a savings account. Sure, CD rates are often higher and they are fixed (unlike savings APYs). But your savings are your cushion against the unexpected and you need them to be accessible — and a CD is not. You might earn slightly less interest in a savings account, but you’ll have peace of mind.

To know how much to keep in savings, look at your monthly expenses and think about how you might cope if you lost your job or faced a medical emergency. Do you have more than one source of income? And how many people rely on you financially? These questions can help you decide how many months’ expenses to sock away.

Once you’ve hit your target, consider how any extra cash might work best for you. That might mean putting it toward other savings goals, such as a down payment for a house or car. You might also decide to invest your money by buying assets that you hope will perform well in the long term.

Right now, the very best savings APYs are just over 5%, but that won’t last forever. In contrast, the S&P 500 has historically generated average annual returns of almost 8% or more. To put that into real money, let’s say you invested $8,000 and left it alone for 30 years. An investment earning 8% a year would earn about $46,000 more than one that earned 5%.

Investing carries more risk than savings accounts. There will be good and bad years, and there are no guarantees. But having a solid savings cushion makes it easier to leave your investments alone. If you invest money you don’t need for five to 10 years or more, you’ll be able to wait out any bad years and allow compound interest to work in your favor.

Bottom line

Your savings are crucial because they give you financial stability. Keep them in a high-yield savings account to maximize your interest earnings. And once you’ve saved enough, consider investing to build wealth for the future.

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This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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