3 Things Clark Says You Should Do With CDs in 2023

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CD rates have been volatile over the past several years. But money expert Clark Howard says that one of the best ways to earn a higher rate of interest on your money right now is to park it in a certificate of deposit (CD)

CDs are deposits that you have to leave in the bank for a certain amount of time, anywhere from one month to five years. Your money will make more than it would sitting in a savings account, usually at a fixed interest rate but sometimes at a variable rate.

How To Get the Best CD Rates This Year

With inflation projected to slow over the near term, Clark has some great money advice — but the time to act is now.

“The smart money looks at 5-year CDs,” Clark says. “The inflation trend is going down, down, down. It’s still too high, but it’s actually going down.”

1. Consider a 5-Year CD

“The best rates on CDs are capping out at 4.5%,” Clark says. “The one-year CD is paying as much as 5.5%. So you’re thinking, ‘Why would I tie money up for five years at 4.5% when I could tie it up for one year for 5-point something?’

“The reason is the inflationary trends and the slowing economy suggests that the odds really favor that CD rates are going to be a lot lower,” he adds. “And the five-year CD gives you the ability to know that for the next five years, you will earn 4.5% more or less, depending on where you go — 4.5% FDIC-insured is great!”

2. Look at Laddering

When it comes to CDs, Clark is a fan of the laddering strategy, which allows you to earn money at different intervals based on when the CD expires.

“You divide your money into equal piles of one-year, two-year, three-year, four-year and five-year CDs,” Clark explains. “And then you’re splitting the difference. You’re getting some really, for savings, a long term thing for five years and then each gradient back to one. That would be the way to split the difference.”

Clark says with a CD ladder, you cover all your bases in case your returns aren’t as profitable as you think they will be. For example, since experts are forecasting a slowing economy in the short term, it makes sense to lock in attractive rates now because the Federal Reserve will likely make rate adjustments that won’t be as beneficial to those trying to park their money in a savings vehicle.

“Let’s say we’ve truly broken the back of inflation in a year. When you go to buy a new CD a year from now, the rates may be much lower than they are now,” he adds. “So that’s an advantage of doing a ladder even today: The money you know you’re really not going to need for 60 months, put a meaningful amount into a five-year CD.”

Read our guide on the laddering strategy for CDs.

3. Go To a Discount Broker

For decades, Clark has advised that you buy CDs through a discount broker, like Charles Schwab, Fidelity, or Vanguard. This is because traditional banks tend to offer two rates: one on their wholesale side and one on their retail side.


The banks “take advantage of their most loyal customers that go direct to them to buy a CD and offer a better deal through discount brokers, because they’re trying to grab what’s known as ‘hot money,'” he says.

Advantages of Buying CDs Through a Discount Broker

Clark explains that there are two clear advantages of buying your CDs through a discount broker vs. a bank:

  • You’ve got magnified FDIC insurance. “Because through the discount broker, they can place your money with so many institutions, you have millions of dollars of FDIC insurance coverage,” Clark says. “Meanwhile, with a single institution, you only have a quarter-million insured through the FDIC.”
  • Better rates: “Discount brokers are able to get you the best rates; better than you’re likely to be able to find on your own.”

Final Thoughts

Clark wants you to look into buying five-year CDs right now to capitalize on the attractive rates while they last. And no matter what you do, don’t buy CDs from a bank; buy from a discount broker instead.

“This is a Never Rule,” Clark says. One thing never to do — unless you hate your money — is go to Bank of America, Wells Fargo, Chase or Citibank to buy CDs because they play you for a fool. They place such ridiculously low rates on their CDs. They’re taking advantage of you.”

Instead, Clark wants you to deal with the top discount brokers. Take a look at the following firm reviews at Clark.com:

“That’s where you’re going to get the best deals — FDIC-insured — on your CDs and on your savings as well,” Clark says.

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