In the current high-rate environment, short-term CDs are offering competitive rates, with 9-month CDs being particularly attractive. Several financial institutions are offering 9-month CD rates of up to 6.09% APY, with varying minimum deposit requirements and early withdrawal penalties. These short-term CDs can help savers achieve their financial goals and maximize interest returns, but it's important to ensure that the chosen account aligns with individual needs and requirements.
Investors, including institutions and wealthy investors, are flocking to short-term U.S. government bonds, particularly 1-year Treasury bills, as a way to navigate the recent surge in long-term interest rates. This trade allows investors to collect a higher yield in the front end of the yield curve, taking advantage of the expectation that interest rates will remain elevated for a longer period. While longer-duration Treasuries have experienced a sell-off, other fixed income instruments have not fully adjusted, creating potential opportunities in the future. Professional managers are also reducing the average duration of their portfolios by investing in 1-year T-bills.
