The 6% CD has arrived.  Should you bite?

Thanks to rapidly rising interest rates, many reputable banks and credit unions are now offering certificates of deposit with impressive rates of over 4%. And in at least two cases, we’re looking at CDs at 6%. But these have some major drawbacks, which means you might be better off with a high-yield savings account (some paying 4.5% or more) or a high-paying CD with less red tape. (Look Here are some of the best high-yield savings account rates And best cd rates Here.)

Security Plus Federal Credit Union offers 11-month, 6% APY CDs A Minimum deposit of $1,000 and maximum deposit of $50,000 for Baltimore City residents. Meanwhile, FrontWave Credit Union offers 6%. One 18-month CDs for residents of Riverside, San Bernardino and San Diego County, California, who can make a minimum deposit of $1,000. “These 6% CDs are primarily local deals, not everyone in the country will be eligible to join these credit unions,” says Ken Tumin, founder and editor of DepositAccounts.com. In fact,

“Another point to note is that these 5% to 6% CDs will likely be short-term CDs with maturities of 18 months or less. This is a similar situation that we see with Treasury yields due to expectations that Rates will drop in 2024 and 2025. Check out the best CD rates you can get now.

Ah, you might be saying – that 6% is not in my future. But the good news is that it may happen soon. As reported, Morgan Stanley analysts estimate that rates on CDs could reach as high as 5.5% later this year. By CNBC. “We saw CD rate increases over the past two weeks, reflecting the high potential of bank management teams,” Betsy Grasek, managing director at Morgan Stanley, told the publication. ,

Other pros think the rate is likely too. “On a nationally available basis, we’ve got a good chance to see 5.5% on 1-year CDs or 6-month CDs between now and the summer,” says Greg McBride, chief financial analyst at Bankrate. A bank or a credit union would be the most likely candidates.”

If you’re looking for a safe place to keep some cash and you’re willing to keep your money tied up for a while, CDs can be an attractive way to earn interest. To qualify for the 5.5% rate on CDs, says NerdWallet banking expert Chanelle Bassett, consumers should make sure they’ve done their research to find the best interest rate that’s available to them as well as Only a period length that matches the timeline of their financial goals. “You can usually open a CD online directly with a bank or credit union, but be sure you can meet the minimum initial deposit for the CD you want and if you want to open a CD with a credit union.” Check to make sure you qualify for membership in that credit union,” Bessette says. SThe best CD rates you can find right here.

Another thing to note is that in order to get these 5% plus CDs, you will probably need to open new online accounts. “Some local credit unions may offer 5% or 6% and in those cases, you may be able to open them in a brick-and-mortar branch,” says Tumin.

That said, McBride suggests that being a credit union member and actively shopping around among top-yielding, nationally available accounts will increase your chances of being able to find and take advantage of the best returns. “If CD yields reach 5.5%, they may not last long, so be ready to lock in quickly when the time comes,” says McBride.