Money Management

The Federal Reserve recently cut interest rates, and it’s probably not done. Find out what this could mean for CD rates in 2025. [[{“value”:”

For most of 2024, certificates of deposit (CDs) had been offering their highest rates in decades. If you shopped around, you could get a CD with a 5.50% APY or higher.

On Sept. 18, the Federal Reserve cut the federal funds rate by half a percentage point. Financial institutions use this to set their savings account and CD rates. After the rate cut, the best CDs are offering about 4.75% to 5.00%. It’s still a good return, but not as much as before.

If you want to earn that much, you should probably open a CD soon. In all likelihood, these rates won’t last into 2025.

CD rates will probably decrease again this year

The Fed is meeting again on Nov. 6-7, and another rate cut is expected. CME Group’s FedWatch tool tracks the probability of this happening, based on interest rate traders. It currently puts the odds of a quarter-percentage rate cut at 86.70%.

Every three months, the Fed also releases the dot plot — a chart with each official’s interest rate projections. Based on September’s dot plot, rates will continue to drop in 2025.

The median projections had interest rates coming down by 1 percentage point in 2024, 1 percentage point in 2025, and half a percentage point in 2026. Since the Fed has already cut rates by half a point this year, that would mean there’s still another half point to go.

There will likely be more rate cuts by the end of 2024. Nothing’s guaranteed, but it seems likely based on the Fed’s projections and the Fedwatch tool. And it wouldn’t be a surprise to see them come down more during 2025. Want to lock in a high rate before that happens? Check our list of the best CDs and open one today.

Projected CD rates in 2025 and beyond

CD rates depend on the bank and the length of the CD. Some banks offer high-yield CDs, with rates significantly above the national average. And even though longer CDs have traditionally paid more, that hasn’t been the case in recent years. Banks are generally offering their highest rates on short-term CDs lasting one year or less.

The table below has projected high-yield CD rates at the start of 2025 and 2026. These are only predictions based on potential rate cuts by the Fed. Actual CD rates could end up being much different based on what actions the Fed takes at its meetings.

What to do with your savings

Should you rush out to put your savings in a CD? If you’re sure you want a CD, then I’d recommend getting one soon. But this type of bank account isn’t right for everyone. Here are the signs a CD is a good fit for your needs:

You have savings you won’t need for a set period.You’re fine with not being able to withdraw your money until the maturity date.You have a fully funded emergency savings with three to six months of living expenses.

If you’d rather have more flexibility, I’d recommend a high-yield savings account instead. These don’t have early withdrawal penalties like CDs, so you can access your money at any time. This is what I personally use for my own savings, as I’m not a fan of CDs.

To earn the most back on your money, consider the Western Alliance Bank High-Yield Savings Premier account. It has one of the highest rates currently available, it’s FDIC-insured, and it has no monthly maintenance fees. Click here to learn more and open your account.

High-yield savings accounts and CDs have their pros and cons. The right choice depends on which one is a better fit for you. Whichever option you choose, pick an account with a competitive APY so you can maximize your interest earnings.

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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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Is your Costco membership coming up for renewal? Read on for a crucial step to take. [[{“value”:”

A Costco membership can do plenty of great things for you. If you have a larger household to feed, buying groceries at Costco could lead to a world of savings. And if you’re someone who enjoys traveling, booking trips through Costco could give you access to not just unique itineraries, but affordable vacation packages.

As a paying member of Costco, you’ll eventually reach the point when your membership comes up for renewal. And if that’s happening soon, there’s one key step you need to take.

Make sure to choose the right Costco membership tier

Costco offers customers two membership tiers. A basic membership costs $65 per year, while an Executive membership offering 2% cash back on purchases costs $130.

You may be inclined to stick with the membership tier you’re already signed up for. But before you renew your membership, you should calculate your Costco spending from the past year to see which tier makes the most sense.

Based on the Executive membership’s 2% cash back rate, $3,250 in annual Costco spending puts $65 in your pocket, which is the exact cost to upgrade. If you spent more than $3,250 over the past year, then it makes sense to pay the extra money for the Executive membership going forward, since you’re likely to come out ahead financially. But if you spent a lot less than $3,250 in the past year, you may want to stick with a basic membership or downgrade to one if you’re currently an Executive member.

That said, if your Costco spending over the past year was close to $3,250, then you should probably stick with or upgrade to the Executive membership in that situation, too. The reason? A small increase in your spending could make it so the cash back you get from an Executive membership exceeds the $65 upgrade fee.

Costco guarantees the Executive membership

You should also know that if you don’t make back your $65 in cash back with an Executive membership, Costco will allow you to downgrade and refund you the difference.

Let’s say you spent $3,000 at Costco in the last year, which would mean $60 back at a rate of 2%. It’s not inconceivable that your spending might increase by a few hundred dollars this year.

But if that doesn’t happen, and you only rack up $60 in cash back on your Executive membership, Costco will refund you $5 when you go to downgrade. So the only reason to steer clear of the Executive membership is if your recent spending for the year was nowhere close to $3,250 and you’re confident you won’t get close this year between your regular spending and large one-time purchases.

You can still earn cash back at Costco with a basic membership

You may run the numbers before renewing your Costco membership and realize that the Executive tier doesn’t make sense. But that doesn’t mean you can’t earn extra cash on your Costco purchases.

Want to rack up cash back without having to pay the additional $65 an Executive membership costs? Click here to sign up for a credit card that offers great rewards for Costco shoppers. That way, you don’t have to worry about spending enough for that membership to make financial sense, nor do you have to worry about remembering to downgrade down the line.

However, you should also know that if the Executive membership does make sense for you, you can double dip and earn your 2% back from Costco on top of whatever cash back or rewards your credit card pays you. And that’s a pretty sweet situation to put yourself in.

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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Want to know what millionaires have in their wallets? Check out recent data on their preferred credit cards. [[{“value”:”

Millionaires use credit cards to pay for purchases, just like many other Americans. You might assume that people with this much money also have ultra-exclusive black cards that are loaded with features. While some certainly do, most of them use credit cards that anyone can apply for.

The Motley Fool Ascent recently surveyed millionaires and non-millionaires about their credit card preferences. Keep reading to find out rich Americans’ favorite type of credit card.

Rich Americans prefer cash back cards

Cash back cards are the favorite type of credit card for millionaire and non-millionaire Americans. Among millionaires, 59% said they had a cash back card, which was the highest total for any type of card.

This type of card is even more popular among non-millionaires, with 72% saying they have one. Credit card preferences are more evenly split among millionaires, as many also use travel cards, balance transfer cards, and gas and grocery cards. But overall, cash back cards are still their No. 1 choice.

Want to see what all the fuss is about — and start earning cash rewards you can send to your bank account every month? Learn more about cash back cards and check out our top picks here.

What makes cash back cards so popular

The great thing about cash back cards is that they’re valuable and easy to use. You can earn quite a bit back with them. Many of the best cash back cards earn as much as 6% on certain purchases and have sign-up bonuses of $200 or more for new cardholders. With the right card, it’s possible to earn $500 per year or more in cash back.

It also takes hardly any time to learn how to use cash back cards. When you pay with one, you earn cash back. You can redeem your cash back via your online account or by calling the card issuer. Redemption options depend on the card, but they normally include:

A statement credit toward your credit card billA deposit into your bank accountA gift card purchase (often with a discount on the gift card)

Other types of rewards cards are more limited. Travel cards are useful, but only if you travel often. A store card is only valuable if you’re a frequent shopper there. But anyone can use cash back to save money on a regular basis.

How to get the most out of cash back cards

If you want to open a cash back card, look for one that fits your spending habits. Some cards earn a flat rate of 2% on every purchase. They work well if your spending is pretty balanced and not heavily weighted toward any particular categories.

There are also cash back cards with bonus categories, such as gas, groceries, dining, or entertainment. These are a good choice if you spend heavily in a few specific areas. Or, you can get a 2% card and a card with bonus categories. Then, you can choose whichever card will earn you more cash back when you make purchases.

While cash back cards are beginner-friendly, there’s one important rule to remember: Pay your credit card balance off in full every month. If you don’t pay in full, your card issuer can charge you interest, which will likely outweigh what you earn in cash back. When you pay in full, you won’t be charged interest and can get the maximum value out of your cash back card.

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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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Hiring a financial professional can improve your finances. Read on to find out how. [[{“value”:”

Financial stress is normal for many Americans, with two-thirds saying they live paycheck to paycheck.

Even if you have enough money to cover your bills, the rising cost of housing and groceries over the past several years has left many Americans’ budgets under stress.

To alleviate some of those worries, a recent survey suggests that hiring a financial advisor could help.

74% of people felt less stressed using a financial advisor

An Edelman Financial Engines survey found that 74% of people say they feel less stressed about their finances because they work with a financial professional. And for those who have one, nearly two-thirds of people say they wished they’d hired their financial advisor sooner.

The biggest stressors for Americans right now are inflation, the economy, and personal finances.

Those results probably come as no surprise to you, considering Americans’ largest expenses have soared recently, including these major increases:

Median home prices are up 31% over the past four yearsRental prices are up 29% since the pandemicGrocery prices have jumped about 20% over the past four years

Everyone faces stressful, unexpected expenses. Click here to view the best high-yield savings accounts for emergency funds.

How a financial planner can help you

Financial planners can’t make rising costs come down (wouldn’t that be nice!), but they can help steer you in the right financial direction. For example, the report said that most people hire an advisor for:

Retirement income planningDeveloping a financial planInvestment managementBudgetingDebt payoffTax guidance

A good financial planner will help you create a roadmap for your finances, helping you achieve predetermined goals.

For example, let’s say you need to get out of debt but don’t know where to start. A financial advisor can help you determine which debts to tackle first and how much you should pay toward them each month. They can also help you decide how to build an emergency fund to keep you from accumulating more debt.

You can put yourself in a better financial position with a high-yield savings account like the Discover® Online Savings account. Click here to learn more and open an account.

How to find the right financial advisor for you

There’s a lot of financial advice out there these days, and not all of it is good. One easy way to find a good financial planner is to search for one on the National Association of Personal Financial Planners (NAPFA) website.

There are two important reasons why you might want to start there.

1. You can search for fiduciary-only planners

A financial planner acting as a fiduciary means they’ve committed to acting in the best interest of their clients and not themselves. All of their recommendations will be focused on improving your finances, not theirs.

2. The financial planners have a fee-based structure

This means you’ll pay a flat fee for your services, like retirement planning or debt management, and your financial planner won’t try to sell you services or products you don’t need. Their fees can be anywhere between $100 to a few hundred dollars an hour. That may seem expensive, but keep in mind that you may only need to meet with your financial planner once or twice per year.

Talking with a financial planner is a great idea if you’re living paycheck to paycheck or are feeling unsure of how to get out of debt or start investing. Not only will you get a clear plan for improving your finances, but you’ll also feel a lot less stressed about them.

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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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Although CD rates are falling, they’re still competitive. Here’s why this writer is putting her money elsewhere. [[{“value”:”

Just a few months ago, 5% CDs were pretty easy to find. Unfortunately, the days of 5% CDs are largely behind us. The Federal Reserve opted to lower its benchmark interest rate by half-a-percentage-point in mid-September in response to slowing inflation. And when the Fed’s benchmark interest rate falls, savings account and CD rates tend to follow.

That said, even though CDs, for the most part, aren’t paying 5% anymore, you can still lock in a pretty competitive rate in the 4% range. That’s not such a raw deal given that with CDs, your principal deposit is protected as long as you bank somewhere that’s FDIC-insured and limit your deposit to $250,000.

But although today’s CD rates are still solid, I’m not motivated to open one. And the reason is that there’s a much more efficient way for me to grow my money.

I’m not willing to settle for lower returns

If I put $10,000 into a 12-month CD paying 4.5%, I’m guaranteed to earn $450 in interest. And that’s a good deal.

But what happens after 12 months? Given that the Fed is likely to continue lowering its benchmark interest rate, CD rates are likely to fall in the coming year. And even if that somehow doesn’t happen, I might earn a much higher return on my money over time by investing it instead of putting it into a series of CDs.

Over the past 50 years, the S&P 500 index’s average annual return has been 10%, accounting for good years and bad years. If I put $10,000 into a stock portfolio and I’m able to snag a 10% return, then in 20 years, I’m looking at growing that investment into $67,275.

Even if I were to earn 4.5% on my $10,000 for 20 years in a series of CDs, that only leaves me with $21,911. That’s a difference of over $45,000. And, well, why should I settle for $45,000 less?

Don’t sell yourself short

There’s only so much money to be gained by putting cash into CDs today — even with rates remaining pretty strong. That said, one reason you should choose a CD is if you have near-term plans for your money.

When you invest, you risk losing money, so you need a lengthy window to recover from market downturns. As a general rule, I try to only invest money if I think I won’t need it for about seven years or more.

If you have money you might need in a year or two, though, then a CD is a smart bet. You can check out this list of the best CD rates to lock in a great return on your money.

However, if you have a pile of cash you don’t expect to use for several years, then investing it could make you a lot richer over time. In that case, find a great online brokerage account and start putting your money to work.

It’s easy to be tempted with CDs given that rates aren’t so far off from 5%. But if you look at the big picture, you’ll realize that a stock portfolio could make you wealthier in the long run.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

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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The Fed is lowering rates. But read on to see if that’ll lead to lower costs for everyday purchases. [[{“value”:”

In mid-September, the Federal Reserve lowered its benchmark interest rate by half-a-percentage-point. And in the coming months, the Fed is likely to continue making rate cuts in response to cooling inflation.

You may be inclined to celebrate the Fed’s rate cuts because they should lead to cheaper borrowing. You may soon find that everything from auto loans to personal loans to mortgages are less expensive to put in place.

But if you’re hoping the Fed’s rate cuts will lead to cheaper groceries and gas, you may need to reset some expectations. In reality, those rate cuts aren’t likely to lower the cost of your everyday purchases.

Why rate cuts won’t drive prices downward

The Fed’s rate cuts should make borrowing less expensive, and that doesn’t just extend to consumers. It should be cheaper for large companies to borrow money in the near term, too.

But large companies are unlikely to pass those savings on to consumers. Why should they when they don’t have to?

Say you used to pay $3.69 for a gallon of milk, but in the past couple of years, the price has risen to $4.29. If your family drinks milk regularly, you’re going to pay what it costs to bring home a gallon if you need it for your coffee and growing kids. Your supermarket’s milk supplier may not be motivated to lower its prices, and your supermarket may not be so eager to cut you a deal, either.

This is just one example. The point, however, is that while the Fed’s interest rate cuts should make borrowing less expensive, they’re unlikely to make everyday goods less expensive. If you want to boost your savings account balance, you’ll need to do some legwork and savvy shopping.

How to save money on the items you can’t do without

You can’t rely on the Fed to make your gas station and supermarket bills less expensive. But you can still save money on things like food and fuel.

First, always dig around for grocery deals. Read through weekly circulars and make shopping lists based on sales. And don’t forget to load up on the digital coupons your supermarket makes available every week. The nice thing about digital coupons is that you can load them to your store card and get access to dozens of deals without having to worry about losing physical scraps of paper.

You can also save money on food by buying in bulk strategically. If you have items you use weekly, bulk buying makes sense.

And you don’t necessarily need a Sam’s Club or Costco membership to buy household staples in large quantities. Your local Target or Walmart might offer a number of essentials in bulk. And while Amazon doesn’t always have the best prices on food, you can save on certain items by using the Subscribe & Save program, which could knock up to 15% off of your costs.

Next, buy your gas strategically. Use an app like GasBuddy to compare prices at local fuel stations. If you have a Costco membership, try to do your food shopping when your tank is low so you can fill up at the same time. Not only does Costco’s gas tend to be cheaper than competing stations, but it holds the TOP TIER designation, which means it’s designed for better performance.

You can also save money on gas and groceries in a roundabout but effective way by using the right credit cards for these purchases. Some credit cards give you extra cash back at the supermarket or pump. Check out this round-up of the best credit cards for groceries and gas to enjoy your share of money-saving rewards.

Know what rate cuts mean for your wallet

Unfortunately, the Fed’s rate cuts are unlikely to drive down the cost of the everyday items you need. Granted, if you’re forced to charge those items on a credit card and pay off the balance over time, you might spend less money on interest in the wake of those rate cuts. But that’s the only form of savings you should expect in the context of stocking your home with the essentials you rely on.

However, with some savvy shopping and coupon-loading, you can find lower prices on the everyday purchases you make all the time. And if you swipe the right credit cards, you can rack up enough rewards to make up for the higher costs that are likely to stick around.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. Maurie Backman has positions in Amazon and Target. The Motley Fool has positions in and recommends Amazon, Costco Wholesale, Target, and Walmart. The Motley Fool has a disclosure policy.

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