Money Management

A high credit score could do a lot of great things for you. But read on to see if it’ll translate into a better rate on a CD. [[{“value”:”

Your credit score is a number that’s worth paying attention to. The higher that number is, the more likely you are to get approved to borrow money. And once approved, a higher credit score could lead to a more favorable interest rate on a loan. The result? Lower monthly payments.

Having a higher credit score could also make your life easier in other ways. If you’re looking to rent a home, for example, a landlord might favor you over an applicant whose credit isn’t as solid.

But there’s one financial area where having a high credit score won’t really benefit you. So it’s important to keep your expectations in check.

Your credit score won’t impact your CD rate

A lot of people are interested in opening certificates of deposit (CDs) these days because rates are so attractive. But even if your credit score is outstanding, it generally won’t result in a higher CD rate.

The reason? Your credit score really only matters in situations where you’re looking to borrow money, such as if you’re taking out a personal loan or applying for a credit card you’ll charge expenses on. With a CD, you’re not borrowing money. Rather, you’re putting money you already have into the bank. So you should be eligible for the same CD rate regardless of what your credit score looks like.

Of course, having great credit might indirectly affect your ability to open a CD. A high credit score generally means more affordable borrowing. So if you’re paying less for a car loan or mortgage because your strong credit made you eligible for a better borrowing rate, then you may have an easier time freeing up cash to put into a CD in the first place. But the rate you’re eligible for is based on what your bank is offering, not your credit score.

How to snag the best CD rate possible

If you’re going to commit to a CD, you want the best rate you can get. Say you have $5,000 to put into a CD. A 12-month CD with a 5% APY will give you $250 in interest. A 12-month CD with a 5.10% APY will give you $255. And while an extra $5 isn’t exactly a life-changing sum of money, why not get that extra if you can?

But your credit score won’t be your ticket to a higher CD rate. Instead, the best way to get the highest rate is to shop around at different banks and compare the products they have available.

These days, you’re likely to find that shorter-term CDs have higher rates than longer-term ones. A 12-month CD, for example, will generally have a higher APY than a 36-month CD, and the reason is that CD rates are expected to fall later this year if the Federal Reserve starts to implement interest rate cuts.

Your credit score is a number worth keeping tabs on and improving as much as possible. But even if you have perfect credit, it may not result in more interest earnings from a CD. To get the best CD rate, you may have to do your fair share of legwork to research rates with different banks. But it’s worth making that effort for a larger payday.

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Costco Home Services can do a lot more than you think — it can help you prepare your home for climate change, too. Find out how. [[{“value”:”

It’s no secret that the planet is warming — in fact, 2023 was the warmest year since recordkeeping started in 1850. NASA has predicted that an average global temperature rise of just 2 degrees Celsius above pre-industrial levels could create catastrophic climate effects that may feed into one another. In 2023, the rise in average global temperature was measured at 1.18 degrees Celsius, and it was the warmest year on record so far.

So that’s fun.

It’s becoming painfully clear that we have to adapt to the changes that are coming or risk suffering from them in ways big and small. And, as amazing as it may sound, Costco can help. Costco home services include a range of installed products that can keep your home more temperature-friendly and save you money as the planet warms. Here are a few to consider today.

1. Window treatments

According to the Department of Energy, cellular shades and curtains can save you a ton of money on energy bills, especially in the summer.

Medium-colored drapes with white backings can reduce heat gain from windows by 33%, which spells a reduced need for air conditioning. Cellular shades, when installed tightly and properly, can reduce unwanted solar heat coming from windows by 60%. In the winter, cellular shades reduce heat loss through those same windows by at least 40%; draperies can reduce winter heat loss by 10%.

But the cool part is that these two types of window treatments can be used together, or in combination with other window treatments that may have smaller, but significant, effects on how much work your HVAC or ductless mini split system has to do.

Your local Costco has partnered with Graber to find and fit the best window coverings for your home, no matter what your goals. Costco members also receive a 10% Costco Shop Card with qualifying window treatment purchases.

RELATED: Best Credit Cards for Costco

2. Garage door installation

Your garage door is often the largest continual surface on the outside of your home, and one that is least likely to be well insulated. Depending on the direction it’s facing, how well your garage walls are insulated, and the size of your garage door, that can spell a ton of heat buildup in the summer and heat loss in the winter.

Plain steel garage doors have an R-value of 0, meaning they have absolutely no insulative value. A wooden garage door has an R-value of 2, which is minimal, but better than nothing. But an insulated garage door may have an R-value of 6.5 or higher, often to 18.4 or better.

To say that differently, an R-value of 8 means that 90% of heat flow is blocked; an R-value of 12 blocks 93% of heat flow; and an R-value of 16 blocks 95% of heat flow. Keeping the heat out in the summer and inside in the winter is the name of the game when you’re trying to battle a changing climate.

Costco’s home services offers installed Amarr garage doors with Liftmaster garage door openers for your home from installers who know their business. After all, why pay for that triple-insulated garage door if it’s still going to leak due to improper installation? Costco members will receive a 10% Costco Shop Card on qualifying purchases.

3. HVAC upgrades

Of course, with all that insulation also comes a need for a more efficient way to control your indoor climate. Air conditioners and heat pumps are rated using a measurement called the Seasonal Energy Efficiency Ratio (SEER). The lower the SEER rating, the higher the electricity demand is on the unit for the same amount of cooling.

Over the last two decades, SEER rating minimums have increased dramatically, leading to a whole new generation of highly efficient HVAC systems. Replacing older units, which may have SEER ratings of 8 to 10, can save you up to 40% on your energy costs, which can spell big cost changes, especially when coupled with other energy savings measures.

Today’s systems start at SEER 13 and generally go up to about SEER 21, but some systems may go even higher, especially if you’re considering converting to a ductless mini split system. Costco has partnered with Lennox to help members feel more comfortable in their homes with less expense and less drag on the energy grid.

Costco members will receive a 10% Costco Shop Card on qualifying equipment, not including duct system repairs or modifications, as well as significant savings all year long on their energy bills.

Climate change is hard, but Costco can help

There may be no stopping some of the worst effects of climate change as we plunge forward into higher and higher average planetary temperatures. But you can help yourself as you march ever forward and get your home ready for the almost certain inevitability.

By adding insulation to windows and garage doors and upgrading to a more efficient climate-control system, you will be able to manage record-breaking hot days, as well as bitter cold spells, much more affordably. It also makes it easier to budget for a less-predictable future.

But being able to do all of this and take advantage of discounts and bonus programs offered exclusively to Costco members? That’s even better.

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

If you’re shopping with a debit card, you could be missing out on hundreds or even thousands of dollars each year. These versatile credit cards offer huge rewards everywhere, including Costco, and are rated the best cards of 2024 by our experts because they offer hefty sign-up bonuses and outstanding cash rewards. Plus, you’ll save on credit card interest because all of these recommendations include a competitive 0% interest period.

Click here to read our expert recommendations for free!

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.JPMorgan Chase is an advertising partner of The Ascent, a Motley Fool company. Kristi Waterworth has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Costco Wholesale and JPMorgan Chase. The Motley Fool recommends Flow. The Motley Fool has a disclosure policy.

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Earning $1,000 a year in a CD is possible. But keep reading for a more efficient way to grow your wealth. [[{“value”:”

If you love free money, then you may be really happy with where certificate of deposit (CD) rates are at right now. With many banks paying 5% or more, you have a prime opportunity to get paid a boatload of money in interest for taking on virtually no risk. All you have to do is open a CD at a bank that’s FDIC-insured and limit your deposit to $250,000 or less.

In fact, thanks to today’s CD rates, you may be in a position to earn a whopping $1,000 in interest in the course of just a year. However, it may take a pretty large sum of money to pull that off.

What it takes to earn $1,000 in interest with CDs

Right now, many banks are paying 5% or a little bit more on 12-month CDs. At Capital One, for example, 5% is the current going rate. So if you want to earn $1,000 in the next year, you’ll need to deposit $20,000. And let’s face it — that’s a large sum.

It may get even harder to earn $1,000 a year with CDs once rates start falling. And that could happen at some point later this year.

The good news is that once you open a CD, your rate is locked in, even if market conditions lead to falling interest rates after the fact. But if next year you can only find a 12-month CD paying 4%, it’ll take a $25,000 deposit to earn $1,000 in interest over 12 months.

You may do a lot better outside of CDs

Earning $1,000 a year with CDs requires you to tie up a lot of cash in the bank. And earning that much money could get harder to do over time as rates fall. So if your goal is to snag $1,000 per year in passive income — meaning, money you don’t have to go out and earn — then you may want to consider investing instead of relying on CDs.

CDs are great when you’re putting money away for near-term goals. But over time, investing in the stock market could do much bigger things for your finances.

Over the past 50 years, the stock market’s average annual return has been 10%. So if you invest $10,000 in stocks, you might earn $1,000 if your portfolio value increases 10% in the 12 months to follow.

Of course, investing is best done over a lengthy period of time. It’s actually not a good idea to only invest for a 12-month period because you could see your portfolio value decline during such a short time.

But let’s say you don’t have $20,000 or $25,000 to put into CDs. Let’s say you have just $5,000, but you put that money into stocks and leave it alone for 30 years. If your portfolio generates an average annual 10% return over that time, you could end up with around $87,000. That’s a gain of $82,000. And when you divide that gain by 30, it’s an average of $2,733 a year — more than $1,000.

So while it’s certainly possible to earn $1,000 a year with CDs, especially now, with interest rates being high, it takes a lot of money to do so. If you don’t have as much money and you’re trying to build up wealth over time, you may want to invest your cash instead.

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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 no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.

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Does your generation have the most debt? Read on to find out — and see what to do about debt. [[{“value”:”

Being in debt is not uncommon, and it’s by no means a sign of a financial shortcoming. Plenty of people borrow money to buy cars, attend college, and finance home purchases and renovations. But there can be such a thing as having too much debt. And the older you are, the more dangerous debt becomes, as it can be very difficult to pay off in retirement.

You may be curious as to which generation has the most debt. And the answer might also surprise you.

Congrats, Gen X — you’ve borrowed the most

Members of Gen X, who are roughly 43 to 58 years old, have a total average amount of $157,556 of debt, according to Experian. That’s far more than any other generation. In fact, millennials come in second to Gen Xers when it comes to household debt. But their average total debt sits at $125,047.

Why are Gen Xers so overloaded with debt? There could be several reasons.

For one thing, many Gen Xers entered college at a time when prices were starting to soar. That may have forced a large number of students to finance their education. Furthermore, Gen Xers — at least older ones — may now be at an age where they’re paying off educational loans not just for their own degrees, but for their kids’ degrees, too. Talk about a double debt whammy.

Also, Gen Xers who bought homes in their 20s or 30s may not be free of their mortgages if they signed 30-year loans. Someone who bought a house at age 32 and is 55 today might understandably have more years to go until they’re debt-free.

Why Gen Xers should try to pay off debt ASAP

Being in debt isn’t optimal in general. But it could be notably problematic for older Gen Xers who may be within five to 10 years of retirement. Technically, you don’t have to shed all of your debt ahead of retirement. But many retirees have to live on less income once their paychecks from work disappear.

Let’s say you’re currently juggling $2,000 in monthly debt payments and bring home a $6,000 paycheck. That may be manageable. But if your monthly income shrinks to $3,500 a month in retirement, suddenly, forking over more than half of that sum to make debt payments could be very stressful. So it’s best to try to shed as much debt as possible before your career wraps up.

Steps to tackling debt

No matter your age, the sooner you get rid of your debt, the less money you’ll spend on interest. So it pays to come up with a plan to become debt-free, or as close as possible. Here’s how.

Figure out which debts need your attention first. If you have a mortgage you’re paying 3% on, worry less about that and more so about your credit card charging you 20% on your balance.Consolidate debt when it makes sense to do so. There’s no need to juggle credit card balances ranging from 20% to 30% APRs when you may qualify for a personal loan at 8%. You can then roll those balances into that loan and pay it off without having to worry about your rate climbing over time.Trim spending to a reasonable degree. You don’t need to slash every fun expense in your budget. But consider scaling back on spending a bit to get ahead of your debt. There’s probably at least one expense you’re paying for right now that you can do without, whether it’s a rarely used gym membership or a subscription box you mostly forget about.Join the gig economy. Working a side hustle could give your income a nice boost and make it easier to pay off debt without having to cut expenses. And if you’re close to retirement, you may want to set yourself up with a part-time gig you can continue to hold down once your career wraps up. That way, you’ll have some extra income at your disposal to replace your missing paycheck on top of savings and Social Security.

It’s not all that shocking to see that Gen X wins in the “most debt” category. But it’s a good idea to get ahead of your debt no matter your age. And the less debt you have, the more money you can put to work by saving or investing it.

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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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