After short-term interest rates reached their highest levels in two decades last year, savers feasted on 5%+ yields on bank deposit accounts and money-market funds. But cash may not be king for much longer. It’s likely that interest rates have peaked in this tightening cycle—the Federal Reserve has pivoted in its fight against inflation and now forecasts at least three rate cuts in 2024.

What that means for savers: Yields on cash drop rapidly when interest rates are cut, and that could cost you hundreds, even thousands, of dollars in income. By year-end, Ken Tumin, founder of DepositAccounts.com, expects yields in the 4%-to-4.5% range…perhaps even lower if there is a recession and the Fed acts aggressively to stimulate the economy. Steps for savers to take now…

Buy longer-term certificates of deposit (CDs). Current yields on CDs are not as attractive now, but CDs can guarantee you the same annual yield for years to come. Use only cash that you won’t need for pressing short-term needs because CDs require you to lock away your money for a defined period. Penalties for “breaking” the CD and making an early withdrawal are steep—typically, 18 to 20 months’ worth of interest. Best longer-term CDs now…

Advancial Federal Credit Union 60-month CD. 5.4% annual percentage yield (APY). $50,000 minimum. Open to anyone who is a member of 200 different associations including the US Dog Agility Association (free to join). Advancial.org

Digital Federal Credit Union (DCU) is offering 5.13% APY on Jumbo Certificates (minimum $25,000) for terms from 12 to 23 months. The DCU Membership Eligibility page lists eight “Participating Organizations” that anyone can join to qualify for DCU membership. DCU.org

United States Senate Federal Credit Union 60-month CD. 4.86% APY. $1,000 minimum. Open to anyone who is a member of the American Consumer Council (free to join). USSFCU.org

Opt for longer-term CDs with mild early-withdrawal penalties if you think you may need access to your money sooner than planned. Best CDs with 180-day early withdrawal penalties now…

BMO Alto Bank 60-month CD. 4.6% APY. No minimum. Alto.BMO.com

Seattle Bank 60-month CD has a 4.5% APY and a minimum deposit of $1,000. CDs are nationally available via an online application. SeattleBank.com

Consider a no-penalty, short-term CD if you want to avoid large drops in yield this year but can’t lock up your money. You earn lower APYs than conventional short-term CDs but get easy access to your money. When funds are withdrawn before maturity, interest is credited through the date of withdrawal. Best no-penalty CDs now…

CIT Bank 11-month CD. 4.9% APY. $1,000 minimum. Full withdrawals permitted six days after opening a CD. CIT.com

Raisin 12-month CD. 5% APY. This financial-technology firm, which has more than one million customers, has partnered with GreenState Credit Union and Freedom Bank to offer federally insured CDs. Note: There is an initial 30-day lockup before you can break the CD and withdraw your money. Raisin.com

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