It seems like forever ago, but the average 12-month certificate of deposit (CD) used to yield well more than 5%.
In fact, prior to the tech wreck of 2000 – and the start of two decades of experimental monetary policy by the Federal Reserve – 5% would have been considered low. It wasn’t usual to see CD yields over 10% in the 1980s. Those were the days!
It’s unlikely that we’ll ever see 10% CD rates again in our lifetimes. Even 5% would seem like a stretch in a world in which the average 12-month CD still yields less than 1% after more than three years of Fed rate hikes.
It’s important to remember, though, that the high yields of the past came at a time of much higher inflation. At today’s lower inflation rates, even a 3% yield allows you to stay well ahead of inflation. You’re not getting rich quick at that yield, but it’s respectable. And importantly, it can be done safely.
Today, we’re going to look at five safe ways to pocket a yield of at least 3%. While you might want to push for a higher return on your long-term investment portfolio, you can consider these as options for your cash savings that you might need in the next one to five years.
Disclaimer
Data is as of June 13.
