Money Management

By shopping around for the right CD, you can get the highest yields possible. Learn more here about this strategy and other ways to maximize CD earnings. [[{“value”:”

If you’re investing in certificates of deposit (CDs), it’s smart to try to maximize your returns. Fortunately, this doesn’t have to be hard. Here are three really simple steps you can take to make sure you’re getting the best yields possible from your investment.

1. Shop around

The best thing you can do to make sure you are earning the highest yields possible is to compare CD offers from different sources before you buy. The FDIC reports the national average on CDs as:

1.53% for 3-month CDs1.79% for 6-month CDs1.80% for 12-month CDs1.52% for 24-month CDs1.42% for 36-month CDs1.33% for 48-month CDs1.50% for 60-month CDs

However, if you buy a CD from a bank offering anything close to those rates, you’re going to earn far less than you should. That’s because there are tons of high-yield CDs of every term length that provide much better yields. In fact, The Ascent’s list of the best 6-month CD rates shows many CDs paying upward of 5.00%.

If you don’t shop around, you could miss out on the most competitive offers. Don’t make that mistake. See what rates credit unions and online banks advertise to customers so you can get the best yields.

RELATED: Best High-Yield Savings Accounts

2. Look for a CD offering daily compounding

If you want to earn the most interest, you should look for another key feature when you’re buying a CD: daily compounding.

When a CD compounds daily, the interest that accumulated on that CD over the course of a day is added to that CD at the end of the day. This means the next day, you’re paid interest on a higher balance. A CD that compounds interest daily will make more money than one that compounds monthly or annually because the interest is not added on until the end of the month or year.

3. Be careful about CDs that auto-renew

Finally, you should look at what your bank’s policy is regarding auto-renewing your CD. When your CD matures, sometimes banks just put it into another CD by default unless you take action to stop that from happening. In some cases, the new CD that your bank rolls your money into pays a much lower rate than the CD you purchased initially.

This doesn’t necessarily mean you shouldn’t buy that CD at all — but if you do, you need to make a note on your calendar and set yourself a phone reminder. That way, you can take action before the money you have invested gets automatically moved into a CD with a lower yield at the end of the term.

If you pay attention to these three factors when you are buying certificates of deposit, you can make sure you’re maximizing your earnings. You work hard for your money, and CDs are a great place to put it right now — so you may as well make the most of them and get the very best possible returns available.

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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.Christy Bieber 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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[[{“value”:”Image source: Getty Images
Overall inflation might be slowing down somewhat, but drivers everywhere are still feeling the pain of rising car insurance costs. Average annual premiums rose from about $3,017 last year to $3,699 this year — a $682 increase. Drivers with accidents on their records or histories of traffic violations could see even bigger jumps.But savvy shoppers who put the following three moves into action should be able to find a competitive offer, whether they’re looking for minimum or full coverage car insurance.1. Shop aroundEvery car insurance company evaluates risk uniquely. Some might penalize a driver more for accidents, while another charges higher rates to younger drivers. A third might charge motorists in a specific city higher rates than many of its competitors.The only way to know how much an insurer will charge a specific driver is to get a quote. Most insurers have online quote tools these days, but some companies may make applicants call an agent for help.It’s best to compare quotes from three to five companies to see which offers the most affordable car insurance for you. Premiums are the biggest factor people look at, for good reason, but there are other important factors too, including:Read more: check out our picks for the best car insurance companies
Available coverageCustomer serviceAvailable discountsWeigh all of these factors together to determine which company offers the greatest value for your money.2. Raise the deductibleGoing with a higher deductible can reduce car insurance premiums significantly. Raising a car insurance deductible from $200 to $500 can reduce the cost of collision and comprehensive coverage by 15% to 30%, according to the Insurance Information Institute. And going with a $1,000 deductible could slash premium costs by 40% or more.The tradeoff is higher out-of-pocket costs in the event of a claim. But drivers who are able to save for their deductible in an emergency fund might not be overly concerned about this.It’s worth exploring a few deductible options to see how they affect premium costs before purchasing a policy. Typically, deductibles vary from around $100 on the low end to $1,000 or $2,000 on the high end.3. Selectively reduce coverageReducing coverage is typically a method of last resort because less coverage could lead to greater out-of-pocket costs in an accident. But there are times it makes sense to take this route.For example, older cars might be worth less than the cost of collision and comprehensive coverage for that vehicle. It doesn’t make sense to pay $1,000 in the event of a claim, for example, to only get $800 back. In this case, dropping collision and comprehensive coverage would be a smart move, as long as the driver doesn’t have a lease or loan on the car.Beyond that, drivers in a financial bind might consider dropping optional protections or even reducing their liability coverage. But it’s best to purchase more than the state minimum protection whenever possible. Otherwise, a driver may not have enough protection in a severe accident.Alert: highest cash back card we’ve seen now has 0% intro APR until 2025
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.”}]] [[{“value”:”

Overall inflation might be slowing down somewhat, but drivers everywhere are still feeling the pain of rising car insurance costs. Average annual premiums rose from about $3,017 last year to $3,699 this year — a $682 increase. Drivers with accidents on their records or histories of traffic violations could see even bigger jumps.

But savvy shoppers who put the following three moves into action should be able to find a competitive offer, whether they’re looking for minimum or full coverage car insurance.

1. Shop around

Every car insurance company evaluates risk uniquely. Some might penalize a driver more for accidents, while another charges higher rates to younger drivers. A third might charge motorists in a specific city higher rates than many of its competitors.

The only way to know how much an insurer will charge a specific driver is to get a quote. Most insurers have online quote tools these days, but some companies may make applicants call an agent for help.

It’s best to compare quotes from three to five companies to see which offers the most affordable car insurance for you. Premiums are the biggest factor people look at, for good reason, but there are other important factors too, including:

Available coverageCustomer serviceAvailable discounts

Weigh all of these factors together to determine which company offers the greatest value for your money.

2. Raise the deductible

Going with a higher deductible can reduce car insurance premiums significantly. Raising a car insurance deductible from $200 to $500 can reduce the cost of collision and comprehensive coverage by 15% to 30%, according to the Insurance Information Institute. And going with a $1,000 deductible could slash premium costs by 40% or more.

The tradeoff is higher out-of-pocket costs in the event of a claim. But drivers who are able to save for their deductible in an emergency fund might not be overly concerned about this.

It’s worth exploring a few deductible options to see how they affect premium costs before purchasing a policy. Typically, deductibles vary from around $100 on the low end to $1,000 or $2,000 on the high end.

3. Selectively reduce coverage

Reducing coverage is typically a method of last resort because less coverage could lead to greater out-of-pocket costs in an accident. But there are times it makes sense to take this route.

For example, older cars might be worth less than the cost of collision and comprehensive coverage for that vehicle. It doesn’t make sense to pay $1,000 in the event of a claim, for example, to only get $800 back. In this case, dropping collision and comprehensive coverage would be a smart move, as long as the driver doesn’t have a lease or loan on the car.

Beyond that, drivers in a financial bind might consider dropping optional protections or even reducing their liability coverage. But it’s best to purchase more than the state minimum protection whenever possible. Otherwise, a driver may not have enough protection in a severe accident.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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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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It’s important to understand how credit scores work. Here are three myths you shouldn’t believe. [[{“value”:”

The average consumer credit score was 715 in 2023, according to Experian. And your credit score may be higher or lower.

But do you understand what goes into your credit score, and how these numbers are calculated? And do you know what it takes to get your credit score from “good” to “excellent?”

Unfortunately, there’s a lot of misinformation out there about credit scores. Here are a few lies you shouldn’t buy into.

1. Checking your credit report will hurt your credit score

It’s not a given that all of the information on your credit report is correct. In fact, the Federal Trade Commission says that 20% of credit reports contain errors.

But the information on your credit report is used to establish your credit score. And so it’s important to check your credit report on a regular basis to make sure it’s accurate.

Now you may have heard that checking your credit report will result in a credit score ding. But that’s not true at all.

When you apply for a loan or credit card and your lender or issuer does a hard inquiry on your credit report, that could cause a modest drop in your credit score — somewhere in the ballpark of five to 10 points. So you do need to be careful not to apply for too many new loans or credit cards in short order.

But you shouldn’t hesitate to pull a copy of your own credit report and review it for mistakes. Checking it yourself won’t mean losing any credit score points. And although you’re entitled to a free copy every week, checking it every three to four months should suffice.

2. Your credit score won’t drop as long as you make your minimum credit card payments

You may be aware that paying bills late can damage your credit score. So you might assume that as long as you’re making your minimum payments on your credit cards every month, you’re okay, credit-score-wise.

But while making those minimums might help you establish a solid payment history, you could be driving your credit utilization ratio upward. That ratio measures the amount of available revolving credit you’re using at once. And once it goes beyond 30%, your credit score could take a dive.

That’s why it’s important to pay more than the minimum due on your credit cards. Not only might it help your credit score, but it can save you a ton of money in interest charges.

3. The higher your income, the higher your credit score is apt to be

Having a higher income may make you more likely to get approved for a car loan or mortgage — if you have decent credit to go along with it. But your income doesn’t affect your actual credit score at all.

Your credit score is a measure of your credit history and activity. But it doesn’t matter whether you earn $50,000 a year or $500,000 a year. If you pay your bills on time and keep your credit utilization low, chances are, your credit score will be pretty good. If you’re late with bills and tend to carry large credit card balances, your score is likely to suffer. You also can’t buy your way into a better credit score — sorry.

It’s important to understand what factors go into credit scores and what steps you can take to raise yours or keep it in good shape. Continue reading up on how credit scores work, so you’re able to make sharp decisions that benefit you and open the door to plenty of borrowing opportunities.

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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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The middle class in America has an income of $58,024 to $94,000. Find out how your income compares to what people in the middle class are earning. [[{“value”:”

Middle class Americans make up about half of the U.S. population and are generally considered to occupy a pretty good position in life. While middle class people aren’t rich, they can usually afford the basics and some luxuries and don’t necessarily have a ton of serious financial worries. Or, at least that’s the goal of a middle-class lifestyle.

So what does it take to be in America’s middle class? Here’s what you need to know, according to Census data showing the earnings of people within different class groups.

If you earn this much money, you’re in America’s middle class

According to the U.S. Census, here’s how the breakdown of household income works out in the United States.

Households in the lowest quintile made $30,000 or lessHouseholds in the second quintile earned between $30,001 and $58,020Households in the third quintile earned $58,024 to $94,000Households in the fourth quintile earned $94,001 to $153,000Households in the fifth quintile earned $153,001 or more

That means the people in the middle — the middle class — earned an income between $58,024 and $94,000. If your household has that much money coming in, you’ll fall within this demographic group.

Now, many people move in and out of different class groups over the course of their lifetime. You might not earn much when you first get out of school, or you may have a few years where you’re unemployed and your income dips below the middle class level. Your class status is flexible and can change over time. But if your earnings right now are between $58,024 and $94,000, then you can rest assured you’re solidly in the middle right now.

Does it matter if you aren’t in the middle class?

In an ideal world, you’d want to earn as much money as possible. You might aspire to having a middle-class income or higher. And that makes good sense. The more money you earn, the more easily you can afford the basics and have some money left to put into your savings account.

But your income is just one factor that determines if you’ll end up wealthy. What you do with your money matters a lot. If you’re in the upper class and earn upward of $153,000 but you live beyond your means and end up with a lot of credit card debt, you might be in a worse position than someone who earns less money but who isn’t managing high-interest debt.

You absolutely should take steps to try to earn as much as you can. This could mean negotiating for salary raises during performance reviews or when you’re hired for a new position. Working overtime, entering management training programs, or taking other steps to learn new job skills could be helpful.

But you also want to ensure you’re keeping your spending to a reasonable level (about 80% of your income or less, including essentials and discretionary spending). You should be saving and investing the rest of your money. If you do that, even if you’re currently in the middle class in terms of earnings, you can end up among the rich when it comes to your total wealth.

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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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Costco membership is all about hot dogs and battling the warehouse crowds, right? Nah. See how you can still benefit from Costco without ever visiting. [[{“value”:”

Most stores don’t require you to pay an annual membership fee to shop there — but Costco is a bit different. To access Costco’s members-only deals, you’ll pay either $60 per year for a Gold Star membership or $120 per year for an Executive membership (with this one, you’ll earn 2% back on most Costco purchases). To make a Costco membership worthwhile, you need to save at least as much money as you spend on the membership.

The most obvious way to benefit is to visit a warehouse location and purchase items there, such as bulk groceries with a lower unit price than you’d see at a grocery store. But what if you live far away from a Costco warehouse, or just plain hate big crowds when you shop? (Guilty on both counts.) Here are two good ways to make a Costco membership work for you — even if you avoid visiting in person.

Costco Travel

Did you know that Costco basically has a built-in travel agency for members? Ever since I learned about it, I’ve been thinking about joining Costco so I can book a vacation this way. Costco Travel doesn’t do flight bookings without other travel, but you can book vacation packages, hotel stays, cruises, and rental cars there (and if your trip requires flights, you’ll do that through Costco alongside the rest of your trip).

I decided to explore cruise bookings, and picked out a cruise that interested me to see if Costco Travel was cheaper than a direct booking. In this instance, it was. I found a price of $539 per person for an inside cabin on a seven-night New England and Eastern Canada cruise sailing in October 2024. The price with the cruise line was $649 per person. That savings alone more than covers a basic membership — and if you take a friend, you’ll cover the Executive membership cost, too.

And when you book travel with Costco, you often get a Costco Shop Card as a thank you (it’s basically a Costco gift card), and this cruise was no exception. So Costco Travel can be a viable way to earn back your membership fee without shopping in person.

Costco.com

Another good way to capitalize on your Costco membership while avoiding the crowds is to shop online. Plus, you’ll actually find a bigger selection of items on the website than you will in stores. It’s important to note that Costco.com’s prices are often higher than what you’ll see in stores, though — but the convenience factor can’t be beat, especially if you live far from a Costco location. It’s also easier to comparison shop via the internet. And unlike visiting a warehouse, you’re allowed to use Mastercard credit cards at Costco.com, rather than being limited to only Visa for credit card purchases in store.

While you can buy furniture, appliances, and beyond at Costco.com, let’s hone in on electronics specifically. I found that I could score a 13″ iPad Pro with 512 GB of memory for $50 less at Costco.com than buying it directly from Apple, for example. While $50 off isn’t enough to completely cover the cost of a $60 membership (let alone a $120 one), Costco is constantly running deals on all kinds of big-ticket items, and if you make some strategic online purchases over the course of a year (or even all at once), you could easily make your membership fee back and then some.

And when you buy a big-ticket item from Costco, you get some pretty sweet perks besides the money savings. Costco has a stellar return policy — with a few exceptions (like alcohol and tobacco purchases), it’ll take nearly anything back, even if you’ve just decided you don’t like the item, and there’s nothing actually wrong with it. Worth mentioning however, electronics (like that iPad) are only eligible for a 90-day return window. But that’s still more time than you might get from some vendors, like Amazon. Plus, Costco extends the manufacturer’s warranty to give you two years of protection on TVs, computers, and more.

Is it worth joining Costco and then never visiting in person?

Honestly, yes. You might not get to take advantage of that famous $1.50 hot dog combo deal at the food court, but Costco has a lot to offer even if you never set foot inside a warehouse. And if you see yourself making big-ticket purchases and/or booking travel through Costco, it might even be worth springing for the $120 Executive membership — getting 2% back on electronics, new furniture, or a sweet vacation can be beneficial for your budget.

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.John Mackey, former CEO of Whole Foods Market, an Amazon subsidiary, is a member of The Motley Fool’s board of directors. The Motley Fool has positions in and recommends Amazon, Apple, Costco Wholesale, Mastercard, and Visa. The Motley Fool recommends the following options: long January 2025 $370 calls on Mastercard and short January 2025 $380 calls on Mastercard. The Motley Fool has a disclosure policy.

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If you don’t buy a CD, you could lose the chance to get today’s great rates. Keep reading to learn how to avoid CD regrets. [[{“value”:”

If you have some spare cash, you should think seriously about buying a certificate of deposit (CD). CDs may not be on your radar, since only around 6.5% of Americans own them. But if you don’t invest in them now, you may end up regretting it later. Here’s why.

1. CDs are offering competitive yields — and they won’t last forever

Today, high-yield CDs are offering very competitive rates. On The Ascent’s list of best CD rates, many are paying above 5.00% — with some as high as 5.15%. The last time yields were this high on CDs was after the 2008 recession.

This isn’t going to last forever. In the past few months, there’s already been a 20% drop in the number of CDs offering a rate of at least 5%. And once these high rates are gone, it could be a long time before they come back up to these levels — if they do at all.

After all, it took the collapse of the housing market and a global recession to bring rates up to this level the last time; and it took a global pandemic, billions in stimulus aid, and unprecedented inflation this time.

If you pass up this chance to get great returns with such a low-risk investment, you may find yourself wishing you’d made a different choice.

2. You can get great rates with a short time commitment

There’s an unusual opportunity with CDs right now. Short-term CDs are actually offering higher yields than long-term CDs. Historically, the reverse has almost always been true. Banks must offer a term premium, or higher yields, to convince people to lock money up for longer periods of time.

Since the expectation is that interest rates will fall soon, the yield curve has inverted. You can buy a 6-month or 1-year CD providing better rates than a 5-year CD. This means you can get these great yields without agreeing to lock up your money for years to come.

If you can make a short-term commitment, you limit your interest rate risk because you won’t be stuck in the CD for long if rates defy expectations and continue rising. You also won’t have to wait a long time to get your money out if you need it for something else. It’s a great opportunity to put money away for a few months and earn a lot on it.

If you don’t take advantage, you could find yourself wondering why you passed up this opportunity.

3. Your high-yield savings account could soon pay a lower rate

The last big reason why you may regret not buying a CD now is because your high-yield savings account could drop its rate soon.

High-yield savings accounts have variable rates. With CDs, your rate is guaranteed until the CD matures at the end of the term. That’s not the case with a savings account. Your rate could drop quickly if the Federal Reserve cuts rates. By then, it will be too late to get the competitive CD rates on offer now. You’ll be stuck with your money sitting in an account paying nowhere near the generous return high-yield savings accounts are currently offering.

You don’t want to regret not acting, so look for a CD to buy today if you have money you won’t need to access for three or more months. Many CDs have no minimum balance requirements, so you don’t even need a lot of money to seize this opportunity and avoid future regrets.

Alert: highest cash back card we’ve seen now has 0% intro APR until 2025

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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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