3 Reasons to Open a CD in November

Ah, November, a month dedicated to crunchy leaves underfoot, giant feasts with the most distant of relations, and, as it turns out, saving money. Although maybe November isn't really known for investing money in certificates of deposit (CDs), this year it should be. After all, your chances to continue to secure a good rate are diminishing, and that means you're going to need to make a move.

Maybe you can give the gift of compounded interest this holiday season.

Even if you don't want to put a CD under the Christmas tree in December, November is a great time to open a CD, and here's why.

1. Rates are on the decline

It's no secret that the Federal Reserve Board met in September and cut the federal funds rate by a half percentage point after the meeting. Leading up to that meeting, and ever since, CD rates have been on the decline. For example, in September, the average yield on a 12-month CD was 4.38%, but it was down to 3.98% in October.

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It's the same case for 24-month and 60-month CDs, too. The average 24-month has dropped from 3.91% in September to 3.66% in October; the average 60-month has gone from 3.71% in September to 3.58% in October. Given that there's at least another half-percent rate cut expected through the end of the year, according to the CME Fedwatch Tool, there is no time like the present to get your CDs locked down.

Luckily for you, we've got a list of some of the highest-yielding CDs available right now. Click here to see what kinds of CD rates you can still secure in November.

2. Lock in solid passive income

High-yield savings accounts (HYSAs) have been all the rage for a while, but as interest rates drop, so do savings account rates. Although you can still get an HYSA in the 4% range if you look pretty hard, there's no way to guarantee they'll stay in that window as other interest rates drop.

The best way to guarantee solid passive income with your savings accounts is to transfer funds (those you're sure not to need in the near term) into certificates of deposit. With a CD, you're locked in for the period of the CD, be it six months, 12 months, or even 60 months. You know exactly how much income you'll generate in that time, regardless of the interest rate environment. And that's a pretty comforting thought, really.

If you're not ready to jump into a CD yet, and want to see where HYSAs will go, we've also got a list for that -- and there are still some great rates to be had for now. You can always jump into a CD when your bank alerts you that it'll be cutting your HYSA's rate.

3. Low input, high rewards

Perhaps the most convincing and important reason to buy a CD in November -- or any time -- is that it's literally a set-it-and-forget-it investment. Unlike stocks or index funds that may require you to review your investment from time to time, a CD demands none of this. It simply makes money in the dark, growing like a mushroom loaded with cash.

CDs generally compound their earnings monthly, which is great for you as an investor. So, for example, if you put $5,000 in a 12-month CD at 3.98%, you'll have earned $202.67 while doing nothing. It gets better the longer you're at it, though. A $5,000 60-month CD at 3.58% will yield you $978.51 without you doing a thing.

CDs are still premium investment vehicles -- for now

The truth is that CDs are still amazing investments for cash you intend to keep in an account for a set period of time (ideally, five years or less). But they won't be great investments forever, as rates drop and other, more active investments begin to pay better. Go ahead and buy that CD this year, wrap it in a bow, set it under the tree, and completely forget about it while it makes money for months (or years) to come.