5 Simple Actions to Take with Interest Rates on the Rise

Citizens & Northern Bank breaks down rising rate environments

by Citizens & Northern Bank – September 25, 2018

You have probably heard that interest rates are creeping higher and you may be wondering how it could affect you. The simple answer is that the money you have in interest bearing deposit accounts (such as a savings account) could earn more than before, but the cost of borrowing money could go up. This means car loans, mortgages, personal loans and student loans may come with have higher interest rates and could end up costing more over the life of the loan.
However, there are many things to consider in a rising rate environment that makes the answer more complex. Here are a few ways to leverage increasing rates to maximize your financial potential.

Explore Refinancing Your Home Loan
If you have considered refinancing your mortgage and have been putting it off, now is the time to get serious. Interest rates were historically low for a long period of time, so refinancing may have been something you kept delaying, thinking that they’d continue to remain low. Now, as they begin to creep up, seriously reconsider whether refinancing is the right move for you. If you’re wondering whether you could benefit from a refinance, this article will help you decide.

Evaluate Your Credit Card Debt
Most credit cards do not offer a fixed interest rate, so they can be influenced by rising interest rates too. If you don’t have the ability to pay off your credit card balance every month, it may be a good idea to explore Home Equity Loan options so that you can transfer outstanding credit card debt to a lower interest rate. The difference between a Home Equity Loan interest rate and that on a credit card could be very substantial and could end up saving you a lot of money over the long term.

Get in the CD Game
Investing in a Certificate of Deposit (otherwise known as CDs) are a great way to tuck your money away and let it earn interest. CDs are typically tiered, meaning the more you put in and the longer the term on the CD, the better interest rate. For a typical fixed rate CD, you can choose from several different terms that work for you. If you are looking to secure some of your savings while earning interest at the same time, talk with your local Customer Service Representative about how a CD could fit into your plan.

Stagger Your CDs
If you have multiple CDs, it’s a good idea to stagger your CDs in a rising rate environment. For example, if you have two 24-month CDs that have recently matured, extend one for 24 another for only 12 months. This lets you reinvest that money at a time when interest rates will presumably be higher.

Seek out Attractive CD Products
Some banks are preparing for rising interest rates by rolling out new and creative CD products with features that will work in your favor. These can include CDs that allow for limited penalty-free withdrawals, such as our E-Z Access CDs, or CDs that carry the flexibility to increase the interest rate if rates are rising, such as our Roll-Up CD option.

These 5 ways to manage a rising interest rate environment can all be done easily. Get started today by visiting your nearest branch or contacting our helpful Client Contact Center. You may be interested in going a bit further and speaking to our Trust & Financial Management team, who will let you know what rising rates could mean for your investments, retirement plan and much more. By making timely choices and being aware of the options you have available, you can work a rising interest rate environment to your favor.

Credits:
Idea/Concept: Citizens & Northern Bank
Videography: Andrew Moore
Video Editing: Andrew Moore
Writing: Citizens & Northern Bank
Anchor: Amiee Jones
Correspondent: Rhonda Pearson

Produced by Vogt Media
Funded by Citizens & Northern Bank

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