The Federal Reserve boosted interest rates for an 11 th time this week, and that means now might be a good time to lock in high yields in a certificate of deposit while the getting is good. Since the central bank embarked on its rate-hiking campaign in March 2022, yields on fixed income instruments, ranging from Treasurys to money market funds and bank deposit products have become more attractive. US2Y US6M 1Y line U.S. 2-year and 6-month Treasury yields The question for investors now is how much longer will the Fed keep its stance on rate policy. Some strategists have suggested income-focused investors begin locking in higher rates so they can keep earning good yields once the central bank shifts gears. That includes considering longer-term certificates of deposit as a place to stash cash you won’t immediately need. Capital One recently pushed up the annual percentage yield on its 2-year CD by 5 basis points to 4.35%. One basis point is equal to one one-hundredth of a percent. Indeed, online banks under Wells Fargo’s coverage have raised rates on CDs by 369 basis points since the start of the Fed’s policy-tightening regime in March 2022, analyst Michael Kaye wrote in a Friday report. As a result, a handful of institutions now offer yields of 5% or close to it for 2-year CDs. Bread Financial pays 5% APY if you’re willing to lock up your money for 24 months. Delta Community Credit Union also offers a 5% yield on a similar CD. Ally Financial also pays that rate on an 18-month CD, a boon to savers who can’t quite hang on for two years. See below for a table of 2-year CDs. – CNBC’s Michael Bloom contributed reporting
