Opening a CD This November? 3 Big Mistakes to Avoid

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Although CD rates are still pretty strong, they’re likely to drop soon enough. In the coming months, the Federal Reserve is expected to make additional interest rate cuts. And there may come a point in 2025 when a CD no longer makes sense. Since rates are still pretty solid this November, it could be a good time to open a CD and take advantage.Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. But you also need to think carefully before opening a CD. And if you’re serious about putting money into a CD this month, you’ll want to avoid these big traps. 1. Not spending enough time rate shoppingWhile the days of 5% CDs may be behind us at this point, rates are still pretty competitive this November. But that doesn’t mean you should open a CD with the first bank whose rates look good to you. You may find that a bank you’ve never heard of has a better CD rate to offer, so it pays to dig around online and see what you come up with. Just make sure to choose a bank that’s FDIC-insured, so your money is protected. You can start by checking out this list of the best CD rates we’ve compiled.2. Putting all of your money into a single CDThrowing a pile of money into a single CD might seem like a smart move. That way, you only have to keep one maturity date in mind, and you only have to shop for a single CD rate. But setting up a CD ladder could be a much better bet.With a CD ladder, you split your deposit into several CDs with varying maturity dates. The benefit of doing this is getting access to your money at different intervals. That could, in turn, help you avoid an early withdrawal penalty.Let’s say you want to put $10,000 into a CD. You might choose a 12-month term thinking you’re good to part with that money for a full year, only to run into an unplanned expense that forces you into an early withdrawal after eight months. In that situation, you’re generally looking at a penalty, the amount of which will depend on your bank. But you might lose out on three months of interest, which is a pretty serious hit. So instead of putting $10,000 into one CD, you may instead want to put $2,500 into four CDs — a 3-month CD, 6-month CD, 9-month CD, and 12-month CD. This way, a portion of your money becomes available every three months. 3. Forgetting how much more money an investment portfolio might give youYou might earn more money in a CD today than in a savings account. But if the money you’re thinking about putting into a CD is for a far-off goal, like college for your kids or your own retirement, then you may want to consider investing your money instead.Over the past 50 years, the S&P 500 has rewarded long-term investors with an average annual 10% return. If you put $10,000 into a stock portfolio that pays you 10% a year over the next 30 years, you could grow that sum into almost $175,000.Even if CDs somehow pay 4% a year over the next 30 years, which is very unlikely, you’re looking at about $32,400. That’s a far cry from $175,000. So while a CD is a good place to put money for a near-term goal, if you don’t expect to use your money for many years, open a brokerage account and invest it instead.You may be in good company if you decide you want to open a CD this November. Many people will no doubt want to capitalize on today’s rates before they start to fall. But make sure to avoid these mistakes so you don’t end up kicking yourself after the fact. Alert: highest cash back card we’ve seen now has 0% intro APR into 2026
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes. We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.”}]] [[{“value”:”

Although CD rates are still pretty strong, they’re likely to drop soon enough. In the coming months, the Federal Reserve is expected to make additional interest rate cuts. And there may come a point in 2025 when a CD no longer makes sense. Since rates are still pretty solid this November, it could be a good time to open a CD and take advantage.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

But you also need to think carefully before opening a CD. And if you’re serious about putting money into a CD this month, you’ll want to avoid these big traps.

1. Not spending enough time rate shopping

While the days of 5% CDs may be behind us at this point, rates are still pretty competitive this November. But that doesn’t mean you should open a CD with the first bank whose rates look good to you.

You may find that a bank you’ve never heard of has a better CD rate to offer, so it pays to dig around online and see what you come up with. Just make sure to choose a bank that’s FDIC-insured, so your money is protected. You can start by checking out this list of the best CD rates we’ve compiled.

2. Putting all of your money into a single CD

Throwing a pile of money into a single CD might seem like a smart move. That way, you only have to keep one maturity date in mind, and you only have to shop for a single CD rate. But setting up a CD ladder could be a much better bet.

With a CD ladder, you split your deposit into several CDs with varying maturity dates. The benefit of doing this is getting access to your money at different intervals. That could, in turn, help you avoid an early withdrawal penalty.

Let’s say you want to put $10,000 into a CD. You might choose a 12-month term thinking you’re good to part with that money for a full year, only to run into an unplanned expense that forces you into an early withdrawal after eight months.

In that situation, you’re generally looking at a penalty, the amount of which will depend on your bank. But you might lose out on three months of interest, which is a pretty serious hit.

So instead of putting $10,000 into one CD, you may instead want to put $2,500 into four CDs — a 3-month CD, 6-month CD, 9-month CD, and 12-month CD. This way, a portion of your money becomes available every three months.

3. Forgetting how much more money an investment portfolio might give you

You might earn more money in a CD today than in a savings account. But if the money you’re thinking about putting into a CD is for a far-off goal, like college for your kids or your own retirement, then you may want to consider investing your money instead.

Over the past 50 years, the S&P 500 has rewarded long-term investors with an average annual 10% return. If you put $10,000 into a stock portfolio that pays you 10% a year over the next 30 years, you could grow that sum into almost $175,000.

Even if CDs somehow pay 4% a year over the next 30 years, which is very unlikely, you’re looking at about $32,400. That’s a far cry from $175,000. So while a CD is a good place to put money for a near-term goal, if you don’t expect to use your money for many years, open a brokerage account and invest it instead.

You may be in good company if you decide you want to open a CD this November. Many people will no doubt want to capitalize on today’s rates before they start to fall. But make sure to avoid these mistakes so you don’t end up kicking yourself after the fact.

Alert: highest cash back card we’ve seen now has 0% intro APR into 2026

This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!

Click here to read our full review for free and apply in just 2 minutes.

We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.

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