High CD Rates Offer Silver Lining Amid Rising Borrowing Costs

Long-term CDs and high-yield savings accounts present opportunities for savers, but rates may not stay high in 2024.

Due to the Federal Reserve's 11 rate hikes since March 2022, borrowing rates have skyrocketed, but this has also created a favorable environment for savers with competitive certificate of deposit (CD) rates, some exceeding 5%.
Long-term CD rates, while not as high as short-term ones, are still elevated compared to what you can typically get. You can easily find rates of 5% to 5.60% on 2 or 3-year CDs right now.
CD rates are locked for the full CD term. This means if rates drop in January or later in 2024, you'll still be earning interest at the rate you opened the account with.
High-yield savings account rates are unlikely to go higher in 2024; in fact, there is a decent chance they will creep down over the course of the year.
The Federal Reserve has repeatedly raised the federal funds rate to fight inflation, and there is some expectation that there will be at least two rate cuts next year, which would likely bring down high-yield savings rates.