When it comes to choosing the right CD term for you, think about your savings goal. For example, a 12-month CD might be appropriate when saving up for a vacation, while a 5-year CD could be better for saving up to buy a home. In general, the longer the term of a certificate of deposit, the more money you’ll likely earn on it. You can use the CD calculator to test out different term lengths and see what best fits your goals. Good to know: whichever Marcus CD term you choose, your high-yield rate is locked in for the full term as soon as you meet the minimum balance of $500. Plus, if you fund your CD within ten days of account opening, the Marcus 10 Day CD Rate Guarantee ensures you receive the highest rate available on your selected CD during the first ten days following account opening.
You could even use a strategy like a CD ladder in which you spread your money across multiple CDs at different term lengths, resulting in each CD having a different maturity date. For instance, you could set up a 1-year, 2-year, and 3-year CD. As each CD matures, you could either withdraw those funds or roll them into a new CD at the current rate with a new maturity date. This way you can benefit from various CD rates while having your money more accessible than if all of your savings were in a single long-term CD.
Another strategy you could try is a CD barbell, in which you divide your savings equally into short-term and long-term CDs (similar to each end of a barbell) in order to try and average out a higher APY over the terms. Longer-term CDs often have higher rates than shorter-term CDs, and strategies like these help you to take advantage of those high-yield rates while also having access to your money in the short-term.
Playing around with the CD calculator can show you the difference in earned interest with CDs at varying lengths and deposit amounts.