Let’s be honest, certificates of deposit (CDs) don’t exactly scream excitement. But they’re way better than earning 0.01% on your savings while inflation eats away at your money.

Right now, top CDs are paying over 4.00% APY — and with the Fed likely to cut interest rates a couple times before year end, that kind of guaranteed return is worth paying attention to.

Inflation costs more than you think

Let’s say you’ve got $10,000 sitting in a checking account earning basically nothing. If inflation is running at 2.7%, then you’re losing about $270 in purchasing power this year.

You don’t see it leave your account. But slowly, silently, your money buys less and less.

That’s why keeping cash in low-interest accounts is riskier than it seems. You’re not just missing out on returns — you’re falling behind.

The upside of CDs: Fixed returns

CDs are like the tortoise in the old fable — slow, steady, and totally underestimated.

But their superpower is certainty. You lock in a fixed interest rate, and you know exactly how much you’ll earn and when. And that predictability matters, especially in today’s economy.

Right now, top-paying CDs offer over 4.00% APY, and some lock-in periods are as short as three months. You won’t get rich overnight. But the right CD can help you keep pace with inflation — and even come out ahead.

For example, a $10,000 deposit into a 12-month CD earning 4.00% APY will grow to $10,400 in a year. Even if inflation stays around 2.7%, you’re still netting a positive return — something most checking and savings accounts can’t offer right now.

When a CD beats a high-yield savings account

High-yield savings accounts (HYSAs) are great for flexibility. You can add or withdraw money whenever you want, and the best online banks still offer APYs in the 4.00% range.

But the trade-off is that HYSA rates can drop at any time.

CDs, on the other hand, lock in your rate for a set term. So even if interest rates fall, you’ll keep earning that guaranteed return until your CD matures.

So how do you choose between the two?

• An HYSA is best if you need access to your cash anytime, like for emergency funds or upcoming expenses
• CDs are best for money you know you won’t need for a few months or longer. You can lock in today’s great APYs and continue earning no matter what happens to interest rates.

Sometimes a hybrid strategy works best. Splitting your savings between both an HYSA and CDs can give you the best of both worlds. You’ll stay flexible and earn more.

Don’t wait for rates to drop

According to the CME FedWatch Tool, interest rate traders are pricing in a 100% probability that the Federal Reserve will cut rates at its next meeting.

If that happens, banks will almost certainly start lowering APYs on savings accounts and CDs shortly after (some have already started pulling back in anticipation of a rate cut).

That means the clock is ticking.

If you’re thinking about opening a CD, doing it now could help you lock in a high rate before the market shifts. Even a short-term CD opened today could earn hundreds more than the same account opened just a few weeks from now.

Compare all the top CD rates and lock in a 4.00%+ APY while they last.