Why a $10,000 long-term CD makes sense with rates cut again

A $10,000 long-term CD comes with lucrative returns and protection against market changes, if opened now. Getty Images/iStockphoto

For the first time since December 2024, interest rates have been cut, giving borrowers reason for cautious optimism.

Savers, however, may want to strongly consider pivoting their approach.

The high rates of recent years on high-yield savings and certificate of deposit (CD) accounts have already diminished in the last 12 months. And, now, with a 25 basis point cut issued by the Federal Reserve on Wednesday, they're likely to continue that gradual but noticeable decline.

But that doesn't mean a CD account, for example, isn't still valuable (at least for the time being). In fact, there's a compelling case to be made for opening a $10,000 long-term CD now, even with rate cuts being issued once again. Below, we'll break down three reasons why this could be the advantageous move to make, if made quickly.

Start by seeing how much interest you could still be earning with a high-rate CD account here.

Why a $10,000 long-term CD makes sense with rates cut again

A long-term CD comes with term lengths longer than 12 months. While that may be difficult for savers to endure, as they will need to keep their money in the account alone, the benefits could be well worth it. Here are three timely reasons why a $10,000 long-term CD could be advantageous for savers right now:

You can still earn more than a thousand dollars in interest

With the right CD term and rate, you can still potentially earn more than a thousand dollars if you lock in a rate now. A 3-year CD at 3.95% now, for example, yields approximately $1,200 in earnings. A 5-year CD at 3.80%, meanwhile, can result in around $2,000 earned. 

Even terms of shorter lengths can result in hundreds of dollars in interest for those savers who prefer to regain access to their funds earlier. So the interest-earning opportunities here are still significant and readily available. But there's no way to tell when, exactly, they'll decline again. So, if you can comfortably afford to part with the $10,000 now, it's advisable to start shopping around.

Get started with a high-rate, long-term CD now.

You'll be protected against potential October and December rate cuts

This latest Fed rate cut could be the first in a series. And with meetings scheduled again for October 28-29 and December 9-10, it's possible, if not likely, that the rate climate could evolve further in the months to come. 

But with a long-term CD, you'll be protected against any rate cuts issued then or even any issued in the early months of 2025, as the long-term CD rate you secure now will remain the same until the account matures. This not only makes the interest earnings simple to calculate, but it will also protect your money in a way that traditional and high-yield savings accounts can not, thanks to the variable rate the latter two account types employ.

Interest will be guaranteed in an unpredictable economy

While the Fed did imply that the pace of interest rate cuts would be slower in 2025 after three were issued in the final months of 2024, overall, experts weren't expecting it to take until September to see the first reduction issued. But thanks to concerns over economic policies, tariffs and an inflation rate that rose and fell throughout the year, only one cut has been issued this year. 

And with unemployment rising, the economy is a bit unpredictable right now. In this climate, conventional investments may ebb and flow, but interest with a $10,000 CD will be guaranteed. That guaranteed return is always a big benefit with a CD, but it's especially important right now.

The bottom line

A $10,000 long-term CD has timely features that savers can benefit from if they take prompt action. With the potential to earn more than a thousand dollars in interest, protection against potential October and December rate cuts and guaranteed interest earnings in an otherwise unpredictable economy, this could be the smart move for some of your money now. Just be sure to calculate the earnings, rate and term carefully, as an early withdrawal penalty on account of this size and length can be expensive.