The interest rate climate could soon be changing again. That was one of the possible takeaways this week after the inflation reading for April showed yet another drop. Now at just 2.3%, the pace of inflation has declined in three consecutive months and is closing in on the Federal Reserve's aimed-for 2% goal. As it gets closer, the central bank could resume the interest rate cut campaign it started in September 2024. 

While the Fed elected to keep its federal funds rate at a range between 4.25% and 4.50% when it met earlier in May, the likelihood of rate cuts is increasing. As of May 16, the tool has a rate cut listed at around a 36% likelihood for July – and around 74% for the Fed's September meeting.

Though rate cuts would be welcome for many borrowers now, it will diminish the returns savers have become accustomed to in recent years, particularly with certificate of deposit (CD) accounts. Rates here surged exponentially, from under 1% in 2020 to 6% or even 7% for savers in the past few years. Though they've dropped since, they're still substantial. Understanding this new dynamic, many be considering making one final attempt to exploit today's high-rate climate. A $10,000 6-month CD may be the smart way to do so. To demonstrate the benefit of this approach, however, it first helps to know how much interest this account type could earn if opened this May. Below, we'll crunch the numbers.

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How much interest would a $10,000 6-month CD earn if opened this May?

Interest earned on a CD is calculated by three primary factors: the deposit amount, the length (or term) of the CD and the interest rate. Here, then, is what a $10,000 6-month CD could earn if opened now, calculated against three readily available interest rates (assuming no early withdrawal penalties or other fees):

• $10,000 6-month CD at 4.31%: $213.23 for a total of $10,213.23
• $10,000 6-month CD at 4.40%: $217.63 for a total of $10,217.63
• $10,000 6-month CD at 4.41%: $218.12 for a total of $10,218.12

So, if you open a 6-month CD with this deposit amount, you'll earn over $200 in just six months. With rates over 4% now but with the real potential for those drop as the year progresses, it may make sense to deposit an even higher amount to earn as much interest in as short of a period as possible. Calculate your potential interest earnings, then, to determine precisely how much you can afford to part with if you decide to open a 6-month CD now.

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6-month CD benefits to know now

Hundreds of dollars earned for very little work isn't the only benefit of opening a $10,000 6-month CD right now. Here are three others:

• A fixed-rate: If you're depositing a large, five-figure sum of money and will be forced to forego access to your funds, you'll want to ensure that the return is both large and predictable. The latter is easy to do with a CD since it has a fixed rate that will remain unchanged even if rate cuts are issued in July or September.
• Flexibility: CD terms can be a few months or a decade. A 6-month CD, however, offers an attractive middle ground. You'll earn a fixed return on your money and ride out any short-term market volatility while still regaining access to your funds for other interest-earning opportunities before the end of the year.
• Protection: Not only will a CD offer you protection against market changes and, thus, rate changes, but it will also protect your money from any impulsive decision making. You'll be less tempted to withdraw funds when you know you'll have to pay an early withdrawal fee to get it and you'll likely be even less tempted to do so with a 6-month CD when the end of the CD term is relatively close.

The bottom line

A $10,000 6-month CD can earn savers close to $220 if opened this May. And it will do so via fixed-rate with flexible terms and protection against a likely, soon-to-be changing rate climate. But that last element is key to remember. Last May, rates on 6-month CDs were close to a full percentage point higher. So, if you know you want the benefits of this unique savings account and want to earn as much money as possible, the smart move would be to act quickly, before rates (and returns) decline again.