Escape Tariff Market Volatility with CDs: Your Financial Safe Harbor

In today’s unpredictable economic climate, market volatility has become challenging reality for investors and savers alike. As economic policies evolve, many are seeking refuge from uncertainty. One often-overlooked solution? Certificates of Deposit (CDs).

Understanding Today’s Volatile Market

Recent years have witnessed significant tariff changes that have sent ripples throughout global markets. These policy shifts have affected everything from consumer goods pricing to investment portfolio performances. For the average investor, this translates to:
• Unpredictable returns on market-based investments
• Increased anxiety about financial planning
• Difficulty making long-term economic decisions
• Potential erosion of savings through inflation and market corrections
When navigating such uncertain waters, stability becomes increasingly valuable—and this is precisely where CDs shine.

Why CDs Offer Shelter from the Storm

Certificates of Deposit provide a refreshingly straightforward approach to growing your money while insulating it from market turbulence. Here’s how they help you escape tariff-related market volatility:
1. Guaranteed Returns
Unlike stocks or bonds whose values fluctuate with market conditions, CDs offer predetermined interest rates locked in for the entire term. When you open a CD, you know exactly how much you’ll earn by the maturity date—regardless of what happens with tariffs or trade policies.
2. FDIC Insurance Protection
Most CDs from banks and credit unions are FDIC-insured up to $250,000 per depositor, per institution. This federal backing means your principal and earned interest are protected, offering peace of mind that market-based investments simply cannot match.
3. Fixed Terms for Strategic Planning
With terms ranging from three months to five years (and sometimes longer), CDs allow you to align your investments with your financial timeline. This predictability is invaluable when other economic factors feel increasingly uncertain.
4. Inflation Hedging Options
While traditional CDs offer fixed rates, some financial institutions now provide step-up CDs or inflation-protected varieties that can help maintain purchasing power even as tariffs potentially drive up consumer prices.

Strategic CD Laddering: Maximizing Flexibility and Returns

Rather than putting all your funds into a single CD, consider implementing a CD ladder strategy. This approach involves dividing your investment across multiple CDs with staggered maturity dates. The benefits include:
• Regular access to portions of your money as shorter-term CDs mature
• Ability to reinvest at potentially higher rates if interest rates rise
• Reduced impact of being locked into a single rate during volatile periods
• Continuous liquidity planning while maintaining higher-than-savings returns

For example, instead of investing $10,000 in a single 5-year CD, you might place $2,000 each in 1, 2, 3, 4, and 5-year CDs. As each CD matures, you can choose to reinvest in a new 5-year CD or use the funds elsewhere, depending on your needs and current market conditions.

When CDs Make the Most Sense in Your Portfolio

CDs can be particularly valuable additions to your financial strategy when:

Beyond Traditional CDs: Exploring Your Options

Today’s financial marketplace offers several CD variations worth considering:
• Bump-up CDs: Allow you to increase your interest rate once during the term if rates rise
• No-penalty CDs: Provide the ability to withdraw funds before maturity without paying penalties
• Jumbo CDs: Offer higher interest rates for larger deposits (typically $100,000+)

Taking Action: Next Steps

As tariff policies continue to evolve and markets respond with volatility, consider these practical steps:
1 Evaluate your current investment mix for vulnerability to tariff-related market swings
2 Compare CD rates across multiple financial institutions, as rates can vary significantly
3 Consider your liquidity needs and choose CD terms accordingly
4 Start small if you’re new to CDs, perhaps with a portion of your emergency fund
5 Revisit your CD strategy quarterly to ensure it still aligns with broader economic conditions

Finding Certainty in Uncertain Times

While no investment strategy is completely immune to economic shifts, CDs offer a rare combination of predictability, security, and reasonable returns. In a world where tariff announcements can send markets into tailspins overnight, having a portion of your portfolio anchored in the stability of CDs can provide not just financial benefits, but also the emotional reassurance that comes with knowing exactly what to expect.

By incorporating CDs into your broader financial plan, you’re not just protecting your assets—you’re buying yourself the freedom from worry that comes with knowing part of your financial future is secured, regardless of tomorrow’s headlines. To learn more about high-yield CDs visit amerantbank.com/digitalcd-promo.

Important Disclosures

Investment products and services are offered through Amerant Investments Inc, a dually registered broker-dealer and investment adviser registered with the Securities and Exchange Commission (SEC) and member of FINRA/SIPC. Amerant Investments is an affiliate of Amerant Bank N.A.

Investments carry additional risks, including the risk of loss.

Interest rate fluctuation – Like all fixed income securities, CD valuations and secondary market prices are susceptible to fluctuations in interest rates. If interest rates rise, the market price of outstanding CDs will generally decline, creating a potential loss should you decide to sell them in the secondary market. Shorter-term CDs are generally less impacted by interest rate movements, as changes in interest rates will have the most impact on CDs with longer maturities.

Lower yields – Because of the inherent safety and short-term nature of a CD investment, yields on CDs tend to be lower than other higher risk investments.

Past performance is no guarantee of future results.

Any fixed income security sold or redeemed prior to maturity may be subject to a substantial gain or loss. Your ability to sell a CD on the secondary market is subject to market conditions. If your CD has a step rate, the interest rate may be higher or lower than prevailing market rates. The initial rate on a step-rate CD is not the yield to maturity. If your CD has a call provision, which many step-rate CDs do, the decision to call the CD is at the issuer’s sole discretion. Also, if the issuer calls the CD, you may obtain a less favorable interest rate upon reinvestment of your funds. Amerant Investments Inc makes no judgment as to the creditworthiness of the issuing institution.

Credit risk – Since CDs are debt instruments, there is credit risk associated with their purchase, although the insurance offered by the FDIC may help mitigate this risk. Customers should evaluate both the CDs and the creditworthiness of the underlying issuer.

Insolvency of the issuer- In the event the Issuer approaches insolvency , CDs may be transferred to another institution, the new institution may offer a choice of retaining the CD at a lower interest rate or receiving payment.

Selling before maturity – CDs sold prior to maturity are subject to a mark-down and may be subject to a substantial gain or loss due to interest rate changes and other factors. Other risks factors to consider may include but are not limited to: interest rates, provisions such as call or step features, and the credit rating of the Issuer. The secondary market for CDs may be limited.

Amerant Investments Inc does not provide legal or tax advice. The information herein is general and educational in nature and should not be considered legal or tax advice. Tax laws and regulations are complex and subject to change, which can materially impact investment results. Amerant Investments Inc cannot guarantee that the information herein is accurate, complete, or timely. Amerant Investments Inc makes no warranties with regard to such information or results obtained by its use, and disclaims any liability arising out of your use of, or any tax position taken in reliance on, such information. Consult an attorney or tax professional regarding your specific situation.

Coverage limits- FDIC insurance only covers the principal amount of the CD and any accrued interest. In some cases, CDs may be purchased on the secondary market at a price that reflects a premium to their principal value. This premium is ineligible for FDIC insurance. More generally, FDIC insurance limits apply to aggregate amounts on deposit, per account, at each covered institution. Investors should consider the extent to which other accounts, deposits or accrued interest may exceed applicable FDIC limits. For more information on the FDIC and its insurance coverage visit www.fdic.gov.

For the purposes of FDIC insurance coverage limits, all depository assets of the account holder at the institution issuing the CD will generally be counted toward the aggregate limit (usually $250,000) for each applicable category of account. FDIC insurance does not cover market losses.