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Should I Lock My Money Into a CD Right Now? · Becoming Financially Confident

• 0:37
  Your bank keeps advertising certificates of deposits with attractive interest rates.
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  They promise you a guaranteed return if you simply leave your money alone.
• 0:47
  And it sounds like an easy win.
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  Yet is locking up your money really the smartest move right now?
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  Let's find out together.
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  Because, yes, I get it.
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  Those guaranteed returns sound appealing, but the right choice is about your plan, not just about the rate.
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  So stay with me today.
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  Let's make sure today's decision still serves you tomorrow.
• 1:19
  Hello and welcome to Financially Confident Christian.
• 1:21
  I'm Ralph Estep Jr.
• 1:22
  And I just want to thank you from the beginning for joining me here today.
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  And today's question comes from a listener that wants to know, should I open up a cd?
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  And.
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  And are today's rates worth locking in?
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  But more importantly, what if I need the money unexpectedly?
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  And listen, I get it.
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  Everyone's seeing these exciting and higher interest rates.
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  But most people are like me.
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  You wonder, what's the catch?
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  So before you lock away savings, make sure it's the right tool.
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  Now, if you've got a question for this show, this show's all about questions.
• 1:54
  You can send it to us by going to Financially Confident Christian.
• 2:00
  We'll put a link in the show notes.
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  But again, that's financiallyconfidentchristian.com/question Well, let's get right to today's listener question.
• 2:08
  Listener writes this.
• 2:09
  Hi, Ralph.
• 2:10
  I've been seeing advertisements everywhere for certificates of deposit paying much better interest rate than my regular savings account.
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  Now, I've got about $15,000 sitting in savings that I don't need immediately.
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  And part of me thinks I should lock it in before rates change.
• 2:27
  My concern is if something unexpected happens, I won't be able to get my money without paying a penalty.
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  I don't want to miss a good opportunity, Ralph, but I also don't want to make a decision that I'll regret later.
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  How do I know if a CD is the right choice?
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  Thank you.
• 2:43
  Well, thank you for sending in that question.
• 2:45
  That's a great question.
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  And that's a question we get on the show all the time.
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  The truth is this.
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  A CD can be an excellent tool, just not the right tool for every dollar that you own.
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  So today I want to help you build a simple framework.
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  Well, let's start off with the basics.
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  Let's talk about what is a cd, because you might be listening or watching right now.
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  You're like, ralph, I have no idea what a CD is.
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  A CD is actually pretty simple.
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  It's a savings product that has a fixed term.
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  Basically, what you're doing is you're agreeing to leave your money untouched.
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  And.
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  And the bank in their part guarantees you a fixed interest rate for the term of that cd.
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  Now, oftentimes, the longer the term, the higher the interest rate because there's more risk.
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  And they're designed for money that you don't need right away because like I said, you're locking it up for a certain period of time.
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  A CD by its very nature rewards patience, not access.
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  So let's get right to the bones of today's question.
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  First thing I'm going to tell you is don't lock up your emergency fund.
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  This is one that I see a lot of people make a mistake with your emergency fund.
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  Those monies that you've got to set aside for emergencies only need to stay accessible.
• 3:58
  They can't wait for maturity dates because you never know when that motor is going to blow in your car.
• 4:02
  You're going to have that unexpected repair around the house, the kids need medicine, something like that.
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  You want to be able to keep that emergency fund liquid.
• 4:11
  One of the things I've talked about on the show before, I love high yield savings accounts for those type of situations because those you can get to right away.
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  I would encourage you to reserve those CDs for longer term savings.
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  Like I said, money meant for emergencies should never require permission for it to reach.
• 4:29
  And that's why we really got to spend a couple minutes here and talk about matching the tool to the goal.
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  Because all of these things we're talking about are tools in your arsenal.
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  Things like a CD are great if you're planning for next year's vacation.
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  Maybe you're planning for a home down payment or property taxes even in six months away.
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  Those are all very appropriate uses for a cd.
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  But like I've said on the show before, every dollar should have an assignment.
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  So the best financial tool is the one that matches your purpose.
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  Now, you mentioned in your question I may end up having to pay a penalty.
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  Let's dig right into that.
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  I want you to understand the penalties most CDs, because you're locking in that money.
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  The bank and you are making an agreement that you're not going to touch this money for a certain amount of time.
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  Most CDs charge an early withdrawal penalty.
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  So you've got to know the terms before you open one.
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  Read the fine print.
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  Yes, you got to really understand what you're getting into.
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  And don't make an assumption that every bank is the same, because not every bank handles these the same.
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  Being wise means understanding the commitment before making It.
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  So never chase a rate without understanding the rules.
• 5:37
  And that goes for CDs, that goes for money market accounts, those high interest savings accounts as well.
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  Always understand the 5 fine print.
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  And in the end, build a balanced savings strategy.
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  Not every one of your dollars belongs in one place.
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  As I've said a couple times today, keep your emergency money accessible.
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  Lock away that money.
• 5:58
  If you've got a clear timeline, diversify your savings strategy and and try to make it simple, because simplicity creates confidence.
• 6:07
  If you really want to get to financial peace, it comes from putting each dollar exactly where it belongs.
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  Now, one of the things that undertones I heard in your question today is sort of this feeling of a lack of faith.
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  And I just want to dispel that rumor right now.
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  Planning ahead is not lack of faith.
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  In fact, scripture says all throughout it examples of wise preparation.
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  Just think about Joseph.
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  Joseph stored grain during years of abundance because God had shown him the difficult years are coming.
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  That preparation on the hand of Joseph didn't replace trust in God.
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  It was part of faithful stewardship.
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  Because we have to remember something.
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  Faith doesn't promise us tomorrow is always going to look like today.
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  It doesn't promise us that there won't be unexpected expenses.
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  And it doesn't promise that every financial opportunity is meant for you.
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  But here's what faith does promise us.
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  God gives wisdom generously to those who ask.
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  You just have to ask for it.
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  And seeking his guidance lets us decide with confidence instead of fear.
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  And that preparation we're talking about today that honors God, that wisdom considers the future.
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  But that stewardship that we try to live in as faithful Christians requires planning.
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  And yes, trust and planning can work together.
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  And that peace you're seeking comes from bringing those two things in alignment.
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  So trust God completely and then steward wisely what he's already placed in your hands.
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  As I said earlier, every financial tool has a purpose.
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  Your job is to simply choose the right one.
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  And that wisdom that you're seeking is going to grow one decision at a time.
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  So here's your big win for today.
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  Today's win is to list every savings goal that you currently have.
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  Just list them out one by one and identify which money must stay available for the short term.
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  But you can also identify the money that won't be needed for several months or longer.
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  And then match each of those goals with the right accounts.
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  Kind of like when you were a kid playing the match game.
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  And then review that timeline before making any changes.
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  Because in the end, when every dollar has a purpose, every financial decision becomes a little bit easier.
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  Well, let's get right to our Bible verse today comes from the book of Proverbs, chapter 24, verse 27.
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  It says do your planning and prepare your fields before building your house.
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  And I just love this one because God values our preparation and that wise planet thinking through this process creates stability and that preparation reduces unnecessary stress and stewardship begins before action.
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  How about we pray together right now?
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  Father God, thank you for giving us opportunities to prepare wisely for the future.
• 9:00
  Lord, help us make decisions that reflect wisdom instead of impulse.
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  It's so easy to live impulsive, Lord, and I just want you to teach us to plan carefully without letting fear run control of us.
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  Give each of us discernment to know when to save, when to invest, and yes, when to wait.
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  May every decision honor you Lord, and strengthen our future that you've called us to build.
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  And we ask this in Jesus name.
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  Amen, friend.
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  As I said at the beginning, a CD isn't automatically good and it's not automatically bad.
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  It's one tool among many in the arsenal of finance.
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  So keep those emergency savings available.
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  Match your savings to your goal and understand that commitment before you're locking in your money.
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  So here's today's takeaways.
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  Know how CDs work.
• 9:50
  Protect that emergency fund.
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  Match your savings tool to your timeline.
• 9:54
  Read those terms carefully and practice wise, intentional stewardship.
• 10:00
  Now, maybe right now you're going through a tough financial season and you could really use some assistance.
• 10:05
  I would love to hear from you.
• 10:06
  You can reach me by going to financiallyconfidentchristian.com/voicemail we'll put a link in the show notes and listen.
• 10:14
  It's super simple.
• 10:15
  You click on that link, you'll go right to website and you push record and I'll hear your voice and I'll talk about it on the show.
• 10:22
  Again, that's financiallyconfidentchristian.com/voicemail thank you so much for joining me today.
• 10:29
  I want to encourage you as I always encourage you, stay financially savvy.
• 10:33
  May God bless you and you have a great day.
• 10:54
  We.