Kiplinger

5 Safe Ways to Earn 3%

It seems like forever ago, but the average 12-month certificate of deposit (CD) used to yield well more than 5%.

In fact, prior to the tech wreck of 2000 - and the start of two decades of experimental monetary policy by the Federal Reserve - 5% would have been considered low. It wasn't usual to see CD yields over 10% in the 1980s. Those were the days!

It's unlikely that we'll ever see 10% CD rates again in our lifetimes. Even 5% would seem like a stretch in a world in which the average 12-month CD still yields less than 1% after more than three years of Fed rate hikes.

It's important to remember, though, that the high yields of the past came at a time of much higher inflation. At today's lower inflation rates, even a 3% yield allows you to stay well ahead of inflation. You're not getting rich quick at that yield, but it's respectable. And importantly,

You're reading a preview, sign up to read more.

More from Kiplinger

Kiplinger4 min read
Are Tech Stocks Nearing Another Bubble Burst?
Forgive me if today's stock market makes me feel a bit like Rip Van Winkle. Maybe, like Rip, I've been asleep since early 2000, which marked the peak of one of the biggest bull markets ever. Consider today's initial public offering (IPO) market. It's
Kiplinger5 min read
What to Know Before Purchasing an Annuity Income Rider
For over a decade, annuities with income riders have become a preferred choice for many retirees without pensions or in need of supplementing their Social Security. Who doesn't want a "guaranteed return" of 5% to 7% and as high as 10% for the next 10
Kiplinger6 min read
How to Lower Your Retirement Tax Rate to Less Than 10%
Is it true that retirement changes everything? No, not literally. But it does significantly change many aspects of your finances, and the more you understand your new situation, the more money you will have available to spend or save. How you set u