Locking in a high return by Suze Orman

Right now, the smartest move you can make is to lock in a safe return of 5% APY (annual percentage yield) or more for the next year to 18 months. And I mean right now! If you wait or file this away as something you’ll get to when you have the time, you are going to miss the chance to get paid 5% APY.

Let me explain.

You can currently purchase a certificate through a credit union or a bank that will guarantee you a return of at least 5% APY for a year or more. Interest payments are guaranteed if funds are held through the complete term period, and you’ll get your principal back once the certificate’s term is over.

Not every financial institution offers such a great deal, but it’s easy to find ones that do. You can do a quick web search of “high yield certificate rates” to find certificate offers that pay 5% APY or more. (And you should check out the current certificate offer at Alliant Credit Union, it’s a great deal. Go to myalliant.com/ultimate)

But I need to say it again: these high yields aren’t going to be around for long.

Time for a quick Suze School lesson 

The rates on certificates react to whatever the Federal Reserve is doing with its Federal Funds rate. For two years the Fed has been raising the Federal Funds rate. That’s why you can currently get that great 5%+ rate on a certificate maturing in a year or more. (And to be clear: the rate you are given when you open a certificate account is locked in for the entire term. If you have a 12-month certificate, you will get paid the initial interest rate over the entire 12-month term, no matter what changes the Fed makes in its interest rate.)

But the Fed has told us that because its rate hikes are working—the rate of inflation has calmed down a lot—they are looking towards reducing the Federal Funds rate. The timing of when cuts might start is up in the air as the Fed continues to monitor the rate of inflation, but it very well could start later this year.

And when that happens, the interest offered on new certificates will start to fall as well.

Please, please, please don’t miss out on this chance to lock in a high return on money you want to keep safe. The Fed has told us that this deal won’t likely last for much longer.

Get saving with Suze Orman’s go-to credit union

Alliant, an award-winning digital credit union, has partnered with Suze Orman to offer a high-rate savings account and bonus for new members. You can also jumpstart you or your family’s savings goals with a certificate.

Save smarter with help from Suze Orman:

• How to save smart by Suze Orman
• You are not on sale by Suze Orman 
• Have you become the bank of mom and dad? by Suze Orman

Suze Orman is the author of 10 consecutive New York Times bestsellers, a two-time Emmy award winner, and your go-to for honest answers on everything finance. She is the most recognized personal finance expert in America today and host of the Women & Money (and Everyone Smart Enough to Listen) podcast. Suze is excited to be a contributor for Money Mentor.

Suze and Alliant teamed up to help Alliant members make the most of their life by teaching them to make the most of their money. New Alliant members are also eligible for The Ultimate Opportunity Savings Account.