The Federal Reserve announced today a lowering of the interest rates 50 basis points from 1.75% to 1.25%. Presumably this will precipitate a nice drop in rates on high yield savings accounts.
Could make sense to lock into a CD or a No-Penalty-CD now to avoid the rate decrease. There also might be a few options (like Elements Financial and Patriot Bank) who have guaranteed rates for a certain amount of time. Lock funds in now before they decrease.
For those unfamiliar, a no-penalty-CD is as good as an ordinary high-yield savings account, the only downside being that when you break it you have to break it entirely. Ally Bank offers a 1.90% no-penalty CD with a $25,000 minimum. You can open multiple no-penalty CD’s, and a lot of people like opening multiple CDs with $25,000 in each. That gets you the highest rate possible on a no-penalty CD, but still gives you flexibility of breaking each $25k without affecting the others. A similar thing might (?) work with Goldman/Marcus who offers a slightly higher rate of 2.00% on their no-penalty CD.
