December 14, 2018

Will Interest Rates Stay Low?

Will Interest Rates Stay LowIf you’re wondering when interest rates will rise, you’re not alone. The Federal Reserve has kept interest rates painfully low since 2008. Their goal is to stimulate lending and speed up the recovery of the economy. However, it is still uncertain when and if they will raise interest rates soon. Smart investors will use this opportunity to take advantage of low interest rates.

Paying Off High Interest Debt

One of the smartest things you can do when interest rates are this low is to pay off higher interest rate debt, such as credit card debt. It may also be wise to refinance into these historically low interest rates.

Keep Steadfast to Your Plan

These lackluster interest rates may hinder your desire to invest into low risk vehicles such as CDs, but it is important to keep your eye on your goal and not make hasty decisions. Saving is the only way to prepare you for unexpected expenses or low income producing times.

Be Smart with Where and How You Save

Choosing the best cd rate or savings account rate takes a little work, but can be beneficial to your long term earnings potential. Also, pay attention to how your interest compounds, as this will greatly impact your investment strategy.

CD ladderingAnother way to save, while staying liquid is to take a CD laddering approach. This allows you to have multiple CDs with different maturity dates. Some of your money will go into long term CDs with a higher rate and some into short term CDs with lower rates. This ensures you can stay liquid on some of your investments and is a safeguard against a changing economic environment.

If you are thinking of buying a home, now is a great time to lock into a fixed mortgage rate. If you are having trouble getting a mortgage, look into how you can increase your credit score.

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For other information on CD Investing Visit these sources:

The Securities and Exchange Commission
The Federal Trade Commission