Latest news with #savers
Daily Mail
a day ago
- Business
- Daily Mail
You could face a nasty fine if you have more than £11,000 in your savings account... as SYLVIA MORRIS reveals the urgent steps you must take now
Savers with £11,000 or more in their accounts may need to get in touch with HM Revenue & Customs to avoid paying a nasty fine. That's because last week it told me it has contacted all savers it knows owe for the 2023-24 tax year.
CBS News
2 days ago
- Business
- CBS News
Why you should open a $10,000 long-term CD this June
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. Depositing $10,000 into a select, long-term CD this June could be the right move for many savers. Getty Images In recent years, the decision to open a certificate of deposit (CD) account was relatively clear. Savers would deposit a specific amount of money into the account and, thanks to the elevated interest rate climate at the time, they'd earn a substantial amount of interest. At one point, some banks were offering CD interest rates as high as 6% or 7%, making it one of the simplest and safest ways to grow your money. So, depositing $5,000, $10,000, or even more into one of these accounts was an easy decision. But what about now, in the unique economic atmosphere of June 2025? The interest rate cut campaign initiated by the Federal Reserve in 2024, which led to reduced rates on CDs, has been paused for the first half of 2025. And inflation, which has been so problematic for millions of Americans, is now close to the central bank's target 2% goal. But with stock market uncertainty and general economic unpredictability relatively high now, many savers may be wondering about the benefits of opening a $10,000 CD this June, especially if they do so with a long-term account (which have terms lasting longer than one year). Below, we'll explain why this could be a wise decision. Start by seeing how much more interest you could be earning with a top CD here now. Why you should open a $10,000 long-term CD this June Here are three compelling reasons why you may want to open a $10,000 long-term CD this month: Rate cuts could be issued in July What are the chances of a rate cut when the Federal Reserve meets again on June 17 and June 18? Just 4.7%, according to the CME Group's FedWatch tool. But that surges to around 25% when the bank meets again in July and around 70% in September. In other words, while a rate cut may not be issued in June, it appears imminent for later this summer. And that will reduce what you can secure with a CD, as many lenders are still offering rates in the 4% range. It's also important to remember that a formal rate cut isn't necessary for lenders to cut their offers to savers, as they may do so preemptively if formal rate reductions appear imminent. So, don't wait for that to become a reality. Instead, start shopping for rates and lenders online now (online banks tend to offer more competitive rates). Start shopping for long-term CDs online today. You'll protect your money against market volatility Stock market performance has been strong this year … and soft … and moderate. Market volatility may be a big reason why your retirement savings and investments have declined in the opening months of 2025. And there's no promise that this volatility will lessen in the months to come. But with a long-term CD you'll protect your money against this instability. That's because CD interest rates are fixed, meaning you'll earn the same rate that you opened the account with even if rates change during the CD term. This will allow steady interest to accumulate, keep your principal intact and allow you to budget precisely by knowing exactly how much interest you'll have earned upon account maturity, regardless of any market changes. You'll earn hundreds (or thousands) of dollars in interest Depending on the long-term CD you choose, you can earn hundreds, if not thousands of dollars, in interest on your money. An 18-month CD at a rate of 4.16% would result in around $630 earned while a 2-year CD at a rate of would earn around $848. A 5-year CD (with a rate of 4.20%), meanwhile, would leave you with around $2,280 in interest. These returns are substantial considering the minimal amount of effort and maintenance required on behalf of the saver. Just be sure that you can keep the money untouched for the full CD term in order to avoid paying an early withdrawal penalty. Additionally, there will be tax implications for any interest earned, so that should be accounted for before getting started, as well. The bottom line The argument for opening a $10,000 long-term CD this June is a strong one. With looming rate cuts likely to reduce what you could owe if you delay opening an account, the inherent ability to protect against continuous market instability and the prospect of earning hundreds or even thousands of dollars in interest, many savers would benefit from taking action now. By doing so, they can earn a substantial return on their money and have some peace of mind knowing that this $10,000 will be safeguarded against any market fluctuations to come in the months and years ahead.
Yahoo
3 days ago
- Business
- Yahoo
Delaying Your 401(k) Rollover Could Cost You $76K, Study Finds
Even though much of the financial world is now digitized, rolling over your 401(k) still often involves a more complicated process that can't be done online. Many plans require you to transfer funds via mail, which can lead to delays in getting your funds invested into your new account. Find Out: Read Next: While you might not think too much about the consequences of this lag time, it can lead to thousands of dollars in lost retirement savings, according to a new study conducted by PensionBee. Here's a look at how much you stand to lose due to delays in a 401(k) rollover. Putting off rolling over your funds and mail delays that are out of your control can have serious financial consequences, especially when you take a long-term view. According to the PensionBee study, even brief two- to eight-week market absences during rollovers can cost savers tens of thousands of dollars, particularly during periods of market volatility. The study found that for savers with a $100,000 401(k) balance, an eight-week processing delay could mean $76,000 in lost returns over 30 years. A $50,000 balance could experience a $38,442 loss due to an eight-week processing delay, and a $10,000 balance could experience a $7,688 loss. Even shorter-term delays can lead to significant losses — a two-week rollover delay could compound to a $37,512 loss over 30 years if you're starting with a $100,000 balance. Be Aware: As these figures show, delaying your 401(k) rollover can have significant financial consequences. But the risks of delaying a rollover go beyond lost returns. 'Everyone thinks they'd never forget a retirement account, but there are 30 million unclaimed accounts that tell us otherwise,' said Romi Savova, founder and CEO of PensionBee. 'For job-changers, each position can become another account left behind. The average person switches jobs 12 times, so the sheer volume of personal admin can be very difficult to manage.' Forgetting to roll over old accounts can make you subject to fees that can eat away at your savings. 'People are often unaware that there are fees associated with retirement accounts,' Savova said. 'While your employer may cover some or all of your fee burden while you're employed, that responsibility can shift entirely onto former employees, often with minimal notice.' If you have a 401(k) account with a balance of $7,000 or less, these fees can eliminate your entire savings. 'Employers can automatically force out small balances into poorly performing Safe Harbor IRAs, which can deplete balances entirely,' Savova said. 'These bad defaults are marked by high fees and low returns, often below 2%. If you don't act fast and have an account under $1,000, your employer may cash it out automatically, leaving you to foot the associated fees and tax penalties.' Rolling over a 401(k) can be a complicated task, but it's important to tackle it sooner rather than later. 'While the system needs to change, consumers can immediately take several steps to minimize downsides,' Savova said. 'First, take an active role in the process. Rolling over a 401(k) is a multistep process, and delays at any point can be costly. When it comes to retirement, time in the market is more important than timing the market — even a few weeks or months out can mean thousands lost over a lifetime.' If you're rolling a 401(k) balance from a former employer into a new 401(k), you may not have a lot of choices, but if you choose to roll into an IRA, make sure you are choosing your provider wisely. If possible, find a provider that offers digital-first solutions with automated tracking. 'The best providers will offer digital rollover solutions, avoiding checks in the mail, and excellent customer support when speaking with your old provider is inevitable,' Savova said. 'Customer-focused providers handle the paperwork burden, proactively follow up with your previous plan administrator and keep you updated throughout the process.' Also, pay attention to more than just fees when choosing a provider. 'While high fees over 1% should generally be avoided, also consider the customer support model and technological capabilities,' Savova said. 'The right provider becomes a partner in your retirement journey, not just a place to store your money.' More From GOBankingRates I'm a Retired Boomer: 6 Bills I Canceled This Year That Were a Waste of Money This article originally appeared on Delaying Your 401(k) Rollover Could Cost You $76K, Study Finds Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Best CD rates today, June 1, 2025 (lock in up to 4.25% APY)
Find out how much you could earn by locking in a high CD rate today. A certificate of deposit (CD) allows you to lock in a competitive rate on your savings and help your balance grow. However, rates vary widely across financial institutions, so it's important to ensure you're getting the best rate possible when shopping around for a CD. The following is a breakdown of CD rates today and where to find the best offers. Historically, longer-term CDs offered higher interest rates than shorter-term CDs. Generally, this is because banks would pay better rates to encourage savers to keep their money on deposit longer. However, in today's economic climate, the opposite is true. Today, the highest CD rate 4.25% APY, offered by Langley Federal Credit Union on its 10-month CD. There is a $500 minimum opening deposit required. Here is a look at some of the best CD rates available today from our verified partners: This embedded content is not available in your region. The amount of interest you can earn from a CD depends on the annual percentage rate (APY). This is a measure of your total earnings after one year when considering the base interest rate and how often interest compounds (CD interest typically compounds daily or monthly). Say you invest $1,000 in a one-year CD with 1.81% APY, and interest compounds monthly. At the end of that year, your balance would grow to $1,018.25 — your initial $1,000 deposit, plus $18.25 in interest. Now let's say you choose a one-year CD that offers 4% APY instead. In this case, your balance would grow to $1,040.74 over the same period, which includes $40.74 in interest. The more you deposit in a CD, the more you stand to earn. If we took our same example of a one-year CD at 4% APY, but deposit $10,000, your total balance when the CD matures would be $10,407.42, meaning you'd earn $407.42 in interest. Read more: What is a good CD rate? When choosing a CD, the interest rate is usually top of mind. However, the rate isn't the only factor you should consider. There are several types of CDs that offer different benefits, though you may need to accept a slightly lower interest rate in exchange for more flexibility. Here's a look at some of the common types of CDs you can consider beyond traditional CDs: Bump-up CD: This type of CD allows you to request a higher interest rate if your bank's rates go up during the account's term. However, you're usually allowed to "bump up" your rate just once. No-penalty CD: Also known as a liquid CD, type of CD gives you the option to withdraw your funds before maturity without paying a penalty. Jumbo CD: These CDs require a higher minimum deposit (usually $100,000 or more), and often offer higher interest rate in return. In today's CD rate environment, however, the difference between traditional and jumbo CD rates may not be much. Brokered CD: As the name suggests, these CDs are purchased through a brokerage rather than directly from a bank. Brokered CDs can sometimes offer higher rates or more flexible terms, but they also carry more risk and might not be FDIC-insured. This embedded content is not available in your region.
CBS News
6 days ago
- Business
- CBS News
Is a short- or long-term CD better this June? Here's what experts think.
We may receive commissions from some links to products on this page. Promotions are subject to availability and retailer terms. The decision between short- and long-term CDs this June will be based on a variety of timely factors. Getty Images While the Federal Reserve continues to uphold the current federal funds rate, savers can maximize their returns in this high-rate environment. A certificate of deposit account (CD) comes with a fixed interest rate so you can lock in returns for a set term. In normal circumstances, long CD terms would provide the most competitive Annual Percentage Yield (APY). However, in these uncertain times, there's a notable switch, and short-term CD accounts are providing the highest interest rates. Though CD interest rates remain elevated, they may start to drop in anticipation of future rate cuts from the Federal Reserve. Based on that, now could be a good time to secure a high CD account interest rate. But unlike a savings account, CD funds aren't liquid and come with early withdrawal penalties if you access them before the CD term ends. So timing is of utmost importance when deciding between a short-term and long-term CD now. We spoke to banking and credit union professionals about which could be better to open this June. Start by seeing how much interest you could be earning with a high-rate CD here. Is a short- or long-term CD better this June? If you want to put your money in something that is more stable than the stock market and offers a high return, a certificate of deposit fits the bill. CD rates may also provide higher yields than a traditional savings account. But you want to have a strategy, especially if you're weighing short vs. long-term CD accounts. "I think anytime someone's making a CD decision, it really should be, am I just trying to maximize the amount of cash that I'm earning or is it a per purchase choice?" says Derik Farrar, head of everyday banking and borrowing at U.S. Bank. Answering this question can help guide you on whether a short-term CD or a long-term CD would be a better option for your particular situation. Why short-term CDs could be a better option this June If you're looking for the highest CD interest rates, there is no doubt that short-term CDs are the better option right now. CD terms of six to nine months are coming in higher than what you might find at 12 months or more. "I think right now in the market, the attractive rates are still really under 6 months," says Farrar. All of the experts we spoke to agree that short-term CDs are optimal for the high rates and earlier CD maturity dates. "I think a short-term CD is a better option than a long-term CD, just because of the current rate environment and the uncertainty that exists in the marketplace right now," says Karin Cook, vice president of client deposit services with Merchants Bank. "I think banks are more aggressive on their short-term rates right now." See what short-term CD rate you could lock in here now. Why long-term CDs could be a better option this June Long-term CDs aren't providing the highest yields in the current environment. However, they could still be a useful tool if you want your money to grow at a fixed rate and park it somewhere. Looking at the CD term maturity and early withdrawal penalties are paramount. Additionally, review your personal financial situation to see if a long-term CD makes sense right now. "A good candidate would be someone who maybe has a high-yield savings account that is earning a lot. So in effect, they've created the short-term CD with a high-yield savings account, and they really want certainty for a longer period of time," says Farrar. Otherwise, the general consensus among the experts we spoke to is that long-term CDs are more risky in the current environment and not as advantageous as in years past. "We recognize that members are nervous. They're worried about the economy. The rates long term really aren't great. We don't want to have our CD portfolio from our members tied up long term because we don't know what the Fed is going to do and where those rates are going to end up," says Carma Peters, president and CEO at Michigan Legacy Credit Union. "Now we do have longer-term certificates that we do offer members. They're not taking them," adds Peters. Why you should use a CD ladder strategy now The current CD rate prediction is that interest rates are likely to fall gradually. As CD account rates are fixed, you can lock in above-average yields right now across various CD terms by using a CD ladder. Through a CD ladder, you can put your money in several certificates of deposit accounts with varying maturity dates. Traditionally, the idea is that you have short-term CDs that can give you access to cash earlier, while getting high rates in long-term CDs. But we're not in a normal environment and there's an inverted yield curve where the better rates are with shorter terms. Because of this, whether it's a good idea to do a traditional CD ladder spread out over years or modify it with several short CD terms depends on your goals and liquid savings. The bottom line The CD interest rate forecast is still somewhat murky, as it seems more and more likely that the Federal Reserve will hold rates steady after its June meeting. In the current environment, it's not just about whether a short-term or a long-term CD is a good idea. Farrar says it's more about, "Do I want to be in a CD or do I want to be in a liquid product?" Given these various factors and the fact that you could get hit with a penalty before your CD matures, there are some questions to ask yourself before deciding between a short-term or long-term CD. What are your goals? Do you have an emergency fund? Do you need those funds before the CD term ends? Your answers can help guide you. But in general, short-term certificate of deposit rates will provide you the better yield right now and won't lock up your funds for too long, which could be a win-win.
