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It can take a lot of time, effort and cost-cutting to save money. And if you’ve been able to save a five-figure amount, like $10,000 or $20,000, it likely didn’t happen overnight, nor was it easy. Because of the sacrifice required to save up this much money, however, you must make it work for you as best as possible, particularly in the unique economic circumstances of July 2025. And if you’ve been keeping that money in a traditional savings account, you’re not getting any real return on your investment. With an average interest rate under 0.40% on this account now, you’re arguably losing money by not transferring these funds elsewhere.
But where should that $20,000 go, instead? There’s a compelling argument to be made for putting it into a certificate of deposit (CD) account this July. While it may require a temporary loss of access to the funds, if you’ve already worked hard to grow your balance, this should be easy to forego in comparison. And the benefits of opening a $20,000 CD this July are multiple. Below, we’ll examine three reasons why a $20,000 CD could be worth opening for you this month.
Start by seeing how much more interest you could be earning with a high-rate CD here.
Why a $20,000 CD is worth opening this July
Not sure if a $20,000 CD can play a valuable role in your savings strategy? Here are three reasons why it could be a smart choice this July:
You’ll protect your money against rate cuts
While there isn’t a significant expectation that the Federal Reserve will slash rates when it meets again later in July (the CME Group’s FedWatch tool has a rate cut probability listed at just 25%), many do expect rate cuts to be issued later in 2025, perhaps as soon as September. And that will result in lower returns on CDs, perhaps even before a formal rate cut is issued. But if you act now, you’ll be able to lock in a rate between 4% and 5% on your $20,000, which will lead to big (and predictable) returns on your deposit. And you won’t need to be constantly moving your money around, as you would with variable-rate options like high-yield savings and money market accounts, allowing you to focus instead on other interest-earning opportunities.
Lock in a high rate on a CD while they’re still available now.
You’ll earn significant amounts of interest
Around $444. That’s what you’ll earn in just six months by depositing $20,000 into a 6-month CD with a rate of 4.49%. While rates will decline for long-term CDs, however, the extended interest-earning timeline makes those accounts favorable, too. An 18-month CD at 4.26%, for example, will result in $1,291.52 earned over that year and a half period. It makes sense, then, to shop around for rates and terms to determine how much you can potentially make by taking action now (online banks tend to offer higher rates than those with physical locations). Just make sure to choose a term that you can easily complete until maturity, or you’ll risk having to pay a costly early withdrawal penalty to regain access.
You’ll have time to consider your next move
It’s hard to know where the economy is heading right now. Inflation just rose in May, but at a barely noticeable level from 2.3% to 2.4%. High interest rates remain frozen, however, and uncertainty over policy and other data points makes it hard to know when those rates will change, and how much they will change by when they do.
Against this backdrop, then, it’s advantageous to take a step back and take the time to consider your next move. A CD account allows you that luxury. By depositing your money into a fixed-rate account, you can take a deep breath and look to explore alternatives while your money grows in the CD. It also allows you to gain a deeper understanding of the current economic landscape without having to sacrifice interest-earning opportunities at the same time. And while that’s always an advantage, it’s a particularly strong one when considering a home for your $20,000 this July.
The bottom line
It may appear daunting on paper to part with your hard-earned $20,000, but with the right CD approach it may make sense to do so this July. With the potential to grow your savings even more, at a rate that will be fixed and predictable, a CD offers favorable features for savers in today’s hard-to-predict economy. Just be sure to shop around online to find an account with the highest rate and best terms to better take advantage of this waning, but still valuable, interest-earning opportunity.
