Why a $10,000 short-term CD makes sense with inflation rising again

CBS News

18-07-2025

After the inflation rate barely moved from 2.3% to 2.4% in May, many borrowers held out hope that the increase was temporary. But those hopes were diminished this week after the Bureau of Labor Statistics reported another rise in the rate, up to 2.7% in June. That pushed the rate further away from the Federal Reserve's target of 2%, all but ensuring another pause in the Fed's rate cut campaign when it meets again at the end of July. And it could even wipe out the chances of a Fed rate cut when the central bank meets again in September, too.
While this isn't the news borrowers had hoped for, it does offer savers an extended opportunity to take advantage of today's high rates in a strategic way. One of the better ways to do so is via a short-term certificate of deposit (CD) account. Specifically, a $10,000 short-term CD could be a smart way to capitalize on this latest inflation development. Below, we'll break down three reasons why a $10,000 short-term CD, specifically, makes sense with inflation rising again.
Start by seeing how much interest you could be earning with a high-rate CD here.
Unsure if a $10,00 short-term CD is the right move for your money now? Here are three timely reasons why it can be:
Ahead of imminent rate cuts, savers typically don't have the luxury of shopping around to find lenders offering the highest rates and lowest fees. But now, with inflation rising again, savers will have a bit more time to shop around to find an ideal bank. As noted, rate cuts are essentially out of the question for July (the CME Group's FedWatch tool has a cut listed at less than a 3% chance now).
And there's no Fed meeting scheduled for August. So, a rush to lock in a high rate isn't necessary. This is particularly important with a large, five-figure sum like $10,000. With this much money set to be locked away in a CD, you'll want to make sure you've picked the right lender. Fortunately, now you'll have a bit more time to do just that.
Start shopping for CD accounts online now.
Long-term predictions about the economy and, more specifically, about the interest rate climate are difficult to make right now. If inflation continues to rise, interest rates could rise with it. So you don't want to lock too much money away for too long, as you may have greater interest-earning opportunities in the coming year. But that's not a guarantee, either.
Fortunately, short-term CDs will allow you to adapt more effectively to a changing economic landscape as accounts here will mature in 12 months or fewer. And flexibility is critical in today's economy and even more so when moving around $10,000.
A top 1-year CD rate is 4.40% now or, put another way, $440 earned on a $10,000 deposit. But if you're looking for an account that will mature sooner, you'll have attractive options then, too. A 9-month CD comes with a rate of 4.26% now (around $318 earned) and a 6-month CD can be found with a 4.45% rate (approximately $220).
While waiting for the economic landscape to shake out, then, you can still earn hundreds of dollars in the interim with the right short-term CD account. But not every bank will offer rates this high, with online banks frequently offering better rates and terms than those with physical branches. Consider starting with your local bank but be cognizant of the online offers, too, to better determine which makes more sense for your money now.
A $10,000 short-term CD may not be the right choice for every saver currently. But with inflation rising and the chances of a rate cut that could impact CD returns diminished, now is a smart time to diligently shop for rates and accounts. A short-term CD offers savers flexibility to adapt to changing market conditions, thanks to a maturity date under one year all while allowing savers to earn hundreds of dollars worth of interest in the interim. So if you're looking to take advantage of what appears to be an extended pause in today's elevated interest rate climate, a $10,000 short-term CD offers a smart and effective way to accomplish that goal.