Money Management

For a long time, longer-term CDs have offered higher rates than shorter-term CDs. Learn how current economic conditions have upended this rule. [[{“value”:”

For decades, a simple rule has applied when investing in CDs. But that rule has not applied in recent months.

Investors considering buying certificates of deposit need to understand why their choices are very different now, so they can make the right decisions about what to do with their dollars.

This rule isn’t in effect right now and hasn’t been for months

Traditionally, when you invested in CDs, you had to decide between:

A CD offering a shorter term, with a lower rateA CD offering a longer term, with a higher rate

Banks had to offer investors more money to buy CDs with longer investment timelines because that was the tradeoff for locking up their cash for longer. This is called the “term premium,” and it refers to the added compensation banks pay investors to take the risk of committing to a long-term CD they’d be stuck in even if rates went up.

Now, however, this rule does not apply. In fact, as the table below shows, the national average rates on short-term CDs are above the national average rates on long-term CDs.

It’s possible to find CDs paying well above these rates if you shop around (you can see multiple CDs paying above 5.00% on The Ascent’s guide to the best 6-month CDs, for example).

But, these national averages still do a good job of showing that you can earn higher returns if you buy a CD that locks in your rate for a year or less compared with if you buy one that commits to paying you your rate for 36 months or longer.

So, why does the longstanding rule not apply right now? It’s simple. There’s a lot of economic uncertainty, but the general consensus among most experts is that rates will go down soon. And banks don’t want to commit to paying you 5.00% on a 3-, 4-, or 5-year CD. But since rates are very high right now thanks to the Federal Reserve’s efforts to fight inflation, banks are willing to offer upward of 5.00% on CDs with shorter terms.

Take advantage of the chance to earn a great rate for a short-term investment

A rate above 5.00% is a pretty great rate when you only have to commit to leaving your money locked up for a very short period. You don’t have to take a chance of getting stuck in a bad investment for years if the consensus is wrong and rates do go up again in the near future. And if they go down (as most people expect), you’ll have your rate guaranteed for a few months or a year and will have earned a very competitive yield on an extremely low-risk investment.

If you have money you aren’t going to need for a few months, why not take advantage of the current environment where the usual rules don’t apply, and earn that great return on the cash? Check out The Ascent’s guide to the best CD rates today and find a CD with a term of 12 months or less to buy now, before the CD market goes back to normal and this chance disappears for good.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

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 bank you choose has a serious effect on your finances. Take a look at five questions to consider when deciding which institution to work with. [[{“value”:”

It used to be that you could only choose from the handful of banks with branches in your hometown. But the rise of online banking has led to an explosion of choices, and for many, that can lead to analysis paralysis.

There is a lot to take in when deciding which bank you’d like to work with. The following five questions can help you figure out what matters most to you and which bank checks most of your boxes.

1. What kinds of accounts are you looking for?

Traditional banks have a variety of offerings, ranging from checking and savings accounts to loans and credit cards. But some online banks have more limited products, at least for now. If you prefer to do your banking all in one place, narrow your search to institutions with all the major account types you expect to need.

There’s nothing wrong with spreading your money across multiple banks if you’re comfortable doing so. But it could make moving your money around a little more complicated. For example, you may have to wait a few days for funds to transfer between banks.

2. How much money do you plan to keep in the bank?

It’s helpful to have some idea of how much you’ll keep in the bank so you know if you have to worry about maintenance fees on your accounts. These are monthly fees you pay for owning the account, unless you meet one of the criteria to waive it. Usually, this means having a certain number of monthly deposits or maintaining a certain minimum balance.

You could always opt for a bank that doesn’t charge maintenance fees, if you prefer. But some of these still have initial deposit requirements. If one bank requires more than you have to open an account, that’s a sign it’s not a good fit for you.

3. How often will you need to deposit or withdraw cash?

Pretty much any bank can handle direct deposit and electronic transfers these days, but accessing cash is a little trickier. If you opt for a brick-and-mortar bank, you’ll want one with branches close by or at least a nearby ATM so you can access your cash fee-free when needed.

Online banks don’t have branches, but most partner with a nationwide ATM network, like Allpoint, so you at least have the option to withdraw cash when you want. Depositing cash is more challenging, though. Deposit-taking ATMs exist, but they’re rare. That’s why some people prefer to maintain a checking account at a local bank so they can deposit cash easily. Then, they can transfer those funds electronically to their other bank account.

4. What are its online and mobile banking tools like?

Most people prefer to manage their money for themselves through an online bank account or a mobile banking app. Most major banks have these, but they’re not all created equal. An app that’s clunky or frequently errors might be too frustrating to use.

It’s worth taking a peek at the reviews for the bank’s mobile tools before you open an account. Look for repeated mentions of specific problems and decide whether you can live with these.

5. How can you get support if you need it?

There are times when you may not be able to do all your banking by yourself. Perhaps you get locked out of your online account, or maybe you want to make a large cash withdrawal and you’re not sure how to go about it. In these situations, great customer service is invaluable.

A good bank should give you access to customer service in several ways. Most have phone support and, if you’re working with a brick-and-mortar bank, you can visit a local branch for help. Some banks also have online chat support. Make sure you’re comfortable with the options available to you and the support hours before working with the bank.

Hopefully, the above questions help you narrow down your search. Compare a few banks you’re interested in side by side before deciding which to go with. You can always change your mind down the road, but this can be a hassle. It’s best to make a decision you feel confident in from the start.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

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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Homeownership is not the exclusive province of parents or future parents — it’s open to all of us, even if we won’t be raising kids. Read on to learn why. [[{“value”:”

Being childfree is wild. An awful lot of people take it personally when you’ve opted out of parenthood — even though it has nothing to do with them. As such, if you’re entering the housing market as a buyer and you’re not buying a house for a nuclear family (two parents plus 2.5 kids, looking for that white picket fence), you might get some raised eyebrows or downright rudeness.

How dare you get a mortgage and buy a home as a childfree person? You’re obviously supposed to keep renting a tiny apartment forever — right?

Well, no. Here’s why it absolutely makes financial sense to buy a house (if you want to), regardless of whether you have kids.

Rents rise — a fixed-rate mortgage payment doesn’t

Let’s clear this up right off: Renting is not “throwing money away.” You’re paying for a place to live, and saving money in the process. Research from The Motley Fool Ascent found that in 2019, homeowners paid more than $8,600 more than renters on their housing costs.

That said, it can be frustrating to see your rent rise over time, and buying a home is a way to combat rising housing costs. If you buy with a fixed mortgage rate (or refinance from an adjustable rate to a fixed one later), you’re effectively locking in your monthly mortgage payment, and it’ll stay the same for the life of the loan. In an unpredictable world, knowing that your housing payment won’t rise can provide reassurance, whether you have kids or not.

Renting with pets can be expensive and difficult

OK, so you don’t have human children — but you might have beloved pets. Finding an acceptable rental that allows pets can be difficult; you’ll often face additional costs in the form of an extra deposit (that may or may not be refundable when you move out) and even monthly “pet rent.”

My three cats are a major impetus for me to be buying a home this year. Despite me pleading with them to get paying jobs, they remain freeloaders — so I’d be paying their rent for them if we moved to a place that required this. Instead, I’m buying us a house, and I intend to make the kinds of improvements that will enhance their lives, like building a catio and installing cat shelves. I wouldn’t be allowed to do this as a renter.

Buying a home can grow your net worth

Finally, I feel hard-pressed to bring up a persistent myth I’ve encountered in the many years since I decided not to have kids. A lot of people assume that just because childfree folks don’t pay an average of more than $310,000 to raise a child to 17, we must be rich. You heard it here, folks — not having kids is no guarantee of wealth.

Childfree people are still beholden to the rhythms of the economy at large, low-paying jobs, and other financial obligations, like caring for elderly or disabled relatives. The wealth we do have is in time and flexibility — if we want to take on a side hustle, go back to school, or focus on other ways to improve our financial standing, we often have more ability to do so than someone responsible for kids.

That said, one good way to increase your net worth over time is by purchasing an asset that will grow in value. At its core, that’s what buying a house is, with a few caveats. It’s a mistake to consider buying as an “investment” in the traditional sense, because you’ll also dump a ton of money into your home over the years you own it. And it’s not a guarantee that your home will eventually be worth a lot more than you paid for it — you stand a good chance, though, especially if you maintain it and perhaps improve it over time.

As you make your payments, you’ll build equity in your home, and eventually will own it free and clear. People without kids deserve the chance to build wealth through homeownership, just like parents do.

If you’re like me, and planning to buy a house for yourself, rather than for kids now or in the future, you’re doing just fine. You too can benefit from the perks of homeownership — so go forth and conquer.

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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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A CD could score you a higher interest rate on your money than a savings account. But is it worth opening a really short-term CD? Read on to find out. [[{“value”:”

There’s a reason certificates of deposit, or CDs, have been so popular in recent months. On the heels of the Federal Reserve’s string of interest rate hikes, CD rates have been quite favorable.

Granted, the same can be said for savings account rates. But with a savings account, your interest rate is not guaranteed — it can rise or fall with market conditions.

With a CD, the rate you get at the time you lock your money away is the rate you’re guaranteed throughout your CD’s term. And often, CD rates are higher than savings account rates, even if only slightly.

Many banks offer CDs in a variety of terms. And often, the shortest-term CD you’ll find is a 6-month CD.

But some banks do offer a 3-month CD. And at first, you might think that it doesn’t make sense to open a CD with such a short time frame. But actually, a 3-month CD could be pretty useful to have, provided you can find one.

When you’re hesitant to make a commitment

While CDs often offer the upside of higher interest rates than savings accounts, and they give you the benefit of a guaranteed interest rate, there’s a downside — you have to commit to keeping your money where it is throughout your CD’s term. If you don’t, you risk a penalty for taking an early withdrawal, the amount of which will depend on your bank’s rules and your CD’s term. The nice thing about opening a 3-month CD is that you’re only making a limited-time commitment.

Let’s say you’re trying to save up a down payment for a home. You’re not sure exactly when you’ll be in a position to buy, and you don’t expect to be making an offer anytime really soon. However, you may be able to buy a home in six months or a year.

In that case, opening a 3-month CD could make a lot of sense. You could score a higher interest rate on your money for a few months and know that rate is locked in. At the same time, your cash would free up in time for when you need it.

When you’re trying to ladder your CDs

Another benefit to opening a 3-month CD is that it might fit in well with your laddering strategy. With a CD ladder, instead of putting all of your money into a single CD, you set up multiple CDs of varying terms so that you have money freeing up at different intervals. This gives you more flexibility and could reduce your chances of getting hit with an early withdrawal penalty.

So let’s say you have $10,000 to put into CDs. If you find a 3-month CD option, you could conceivably split that sum into four and then open $2,500 CDs with terms of three months, six months, nine months, and 12 months. This way, some of your money becomes available to you every three months.

An option that may be worth pursuing

You might think that a 3-month CD isn’t worth opening because you’re only benefiting from a higher interest rate, or interest rate stability, for a short period. But clearly, there can be advantages to a really short CD term. So you may want to open one of these CDs — that is, if you can find one.

Many banks don’t offer CDs with such a short term, but some do. Alliant Credit Union, for example, has a 3-month CD, and if you do your research, you’ll likely find more banks with that same offering. Make sure to compare your options no matter what, because even though you’re only talking about three months of interest, you might as well earn as much on your money as you can.

These savings accounts are FDIC insured and could earn you 11x your bank

Many people are missing out on guaranteed returns as their money languishes in a big bank savings account earning next to no interest. Our picks of the best online savings accounts could earn you 11x the national average savings account rate. Click here to uncover the best-in-class accounts that landed a spot on our short list of the best savings accounts for 2024.

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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Want a business class air travel experience at a fraction of the price? See how to beat the crowds with flexible bookings. [[{“value”:”

It’s true that if you’re a frequent flyer who spends a lot on premium travel rewards credit cards, you can get some fun perks and sweet upgrades. But some of the best airline experiences I’ve ever had were the times when I spent the least money.

On a recent trip to Europe, I got a super cheap airline ticket for $570 (round-trip). It ended up being one of the happiest, most comfortable trans-Atlantic flights I’ve ever had. The flight was nearly empty! I had a whole row of basic economy seats to myself! I was able to stretch my legs (I’m 6’3) and take up all three seats, and use all the overhead compartment space I wanted.

Want to see how I got a cheap, comfy airline experience without having elite status or upgrading to business class or using a premium travel credit card? It’s all about being flexible (with dates, airlines, and flight times).

Here’s how you can recreate this cheap flight hack for your next international vacation.

1. Start with Google Flights

There are a lot of great flight search tools to find cheap airfares, like Skyscanner and Kayak. But personally, I prefer Google Flights. I use Google Flights as the home base and starting point for all of my air travel bookings. Here are a few reasons why I love Google Flights.

Convenient “date grid” for flexible pricing

Google Flights has a “date grid” that shows you different airline ticket prices based on flexible dates. This makes it easy to see how much you save if you fly out a few days earlier, or come home two days later.

Search multiple airports

It’s easy to use Google Flights to search for flights from multiple airports in different cities (for your departure and/or your destination). Where I live in the Midwest, sometimes I can save hundreds of dollars on flights by driving three hours to fly into and out of a different airport.

And sometimes you can get cheaper flights by searching for destinations across multiple cities, if you’re flexible about where to land and begin your trip. For example, if you want to fly to Europe, you could search for flights arriving in Paris or Amsterdam or Frankfurt.

Filter by airline (and more)

Google Flights also has easy-to-use search filters so you can sort by airline or by airline alliance. You can even zero in on details like “which fares will give me a free carry-on bag” (not all airlines offer this anymore).

2. Be flexible on (almost) everything

I got my cheap flight to Europe by using Google Flights’ flexible price “date grid” to find the lowest-cost airfares from my home city of Des Moines to Munich, Germany (where one of my best friends lives).

For this trip, I was flexible on most things. I was flexible about dates; I would happily stay in Europe for a few days longer if it meant a cheaper fare, because I was going to stay with my friend for free. I didn’t search multiple airports on this trip, because I just wanted to fly out of my home airport in Des Moines without having to drive to Chicago or Minneapolis.

And I was also flexible about airlines — I’ll fly on almost any international airline, as long as the price is cheap and the connections are doable. I chose an airfare that required me to switch airlines between United Airlines and its partner, Lufthansa — but it was no big hassle.

When I saw the Google Flights airfare price results come up, I was shocked to discover a $570 round-trip fare — and I immediately grabbed my credit card to book it. If you want to fly from the Midwest to Europe, that’s a really cheap price; I don’t even think my first-ever flight to Europe 24 years ago was that cheap. But because I was flexible about (almost) everything, I got a great deal.

3. Go when (and where) other people aren’t

Why was my plane ticket so cheap? For one thing, I was traveling to Europe during an off-peak travel season. I’ve also had good luck in the past getting cheap trips to Europe at unpopular times; for example, I once had a great three-week trip to Europe in February, for $720 round-trip, because most international tourists don’t want to travel there during winter.

But you know what? Europe in winter is still Europe — even if it’s cold and gray, you can go to museums and coffee shops and bars, and have lots of fun indoors. And Europe’s winters are milder than the frigid cold and life-threatening blizzards of my home city in the Midwest. Traveling during off-peak tourist seasons makes me feel like I’m beating the system.

I also snagged a cheap airline ticket because I was traveling at unpopular times, on less-crowded flights. Not everyone wants to fly out of Des Moines at 6:30 p.m. on a weeknight, apparently — or connect through Chicago in only 45 minutes. But I made it work! It’s part of the adventure! I love racing through the airport for a can’t-miss flight connection — it makes life feel more urgent, more focused, more vibrant.

Bottom line

The more flexible you can be with your travel plans, the more money you can save on airline tickets. If you want to get a great price on international airline travel especially, it’s often worth using some extra paid time off so you can fly out earlier — or come home later.

Be willing to try different international airlines, accept an overnight stopover or long layover at exotic new airports, and fly at times of day (and seasons of the year) when most other people don’t want to travel.

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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.Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors. Citigroup is an advertising partner of The Ascent, a Motley Fool company. Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. The Motley Fool has positions in and recommends Alphabet. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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Humans are fed stereotypes throughout life. Keep reading to learn more about the stereotypes surrounding women and finances. [[{“value”:”

Most of us have zero patience for lying, which may help explain why we spend so much time trying to separate fact from fiction. Some lies are meant to manipulate us, while others result from fears and prejudices, stories made up to make one group of people feel better about themselves.

We’re not sure who began the entire “women are not good with money” story, but we know it’s a lie. Told often enough, most lies begin to sound like the truth. Take a look at the following list and decide which of these lies about women and money you have grown to believe.

Lie No. 1: Women are bad at math, which leads to them being bad with money

An interesting study by Giftcards.com discovered how differently parents speak to a child about money based on gender. The study found that parents discuss important issues like financial literacy, investing, and credit scores with their sons more often than with their daughters. On the other hand, daughters hear about budgeting and saving, perhaps reinforcing the myth that all little girls grow up to be mothers and house managers.

The result: Women often enter adulthood with less financial savvy than men, leaving them vulnerable to financial abuse.

The fix: Deliberately prepare your child, male or female, to fend for themselves financially. That means knowing how to earn money and understanding how to save and invest.

Lie No. 2: Women spend money frivolously

We all know the old trope: A woman spends more than she should, comes home with half a dozen shopping bags, and hides the evidence of her spending from her partner. Another study — this one by Starling Bank — looked at more than 300 financial articles. Shockingly, 65% of the financial articles described women as excessive spenders. Women were advised to avoid splurging on large or unnecessary items.

However, a joint study by CNBC and Acorns found that men and women are equally likely to make impulsive purchases. In fact, men are more likely to spend $100 or more on impulse purchases than women are.

The result: Women are painted as frivolous when, in fact, nearly everyone can be tempted to make an impulsive purchase.

The fix: Don’t feed into the myth that only women can spend unwisely. It diminishes women and gives others (who may actually need help with the issue) a free pass.

Lie No. 3: Women are risk-averse

Historically speaking, investing has been a giant Boys Club. After all, it wasn’t until the 1960s that women had a legal right to open a bank account in their own name. In 1974, the Equal Credit Opportunity Act was passed, prohibiting credit discrimination based on gender. While women were busy fighting for things like the right to open a bank account or credit card in their own name, men of means were busy investing.

Not surprisingly, studies have shown that women are more cautious about investing, perhaps because women have been investing on their own for a relatively short time. Yet women do well as investors, despite their cautious approach. They are willing to do more research and are open to changing their minds when research shows they’re on the wrong track.

The result: Financial professionals can underestimate women. Worse, women may not receive the same investment suggestions as men because it’s assumed they’re unwilling to take risks.

The fix: Look for a financial advisor who specializes in working with women, or ask female friends and family members who they work with and how their advisors treat them.

When it comes to personal finances, no one does things exactly right. We all learn on the go, hopefully becoming wiser with each mistake. However, holding on to old myths about women and money is harmful to roughly half the world’s population.

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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.Discover Financial Services is an advertising partner of The Ascent, a Motley Fool company. Dana George has no position in any of the stocks mentioned. The Motley Fool recommends Discover Financial Services. The Motley Fool has a disclosure policy.

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