Putting your money away in a savings account is back in fashion as the Federal Reserve has been steadily raising interest rates since March 2022, and one of the most attractive options is a CD account. Though a big question many have is whether to go for a 1-year vs. a 5-year CD account.
"One-year CDs can be good for a number of reasons — short-term savings, CD ladders, savings for a known spend in a year," Marco Rimassa, CFP at CFE Financial, told Kiplinger. "Five-year CDs are a bit more specialized as an investing tool because there is some risk of locking into a rate that doesn't adjust with interest rate changes over this time. They can be good as part of a CD ladder, but they are also good to fix payouts for those looking for 'fixed' income, such as retirees or more conservative investors."
