Laid off suddenly? Experts reveal the number 1 savings tool to use if you lose your job

Layoffs 2025: Losing a job can be difficult, especially when it happens without warning and there isn’t a financial backup to rely on. The fear of layoffs is growing among workers across the US.

A recent survey by MyPerfectResume found that more than 80% of workers are worried about losing their jobs this year, as per a report. That concern isn’t misplaced. US employers have already cut nearly 950,000 jobs so far this year, marking the highest number of layoffs since 2020, as per Challenger, Gray & Christmas. The Trump administration has also said that 4,108 federal employees have been let go since October 1, when the ongoing government shutdown began, as per a Yahoo Finance report.

What is a Certificate of Deposit

In such uncertain times, maintaining steady cash flow and having an emergency fund for essential expenses becomes crucial, as per the report. One financial tool that can help with this is a certificate of deposit, or CD, as per the report.


A CD is a deposit account that offers a fixed interest rate in exchange for keeping money in the account for a set period, as per the Yahoo Finance report. You start by depositing a lump sum, keep it in the account for the agreed term, and withdraw the principal and interest once it matures, as per the report.

CDs often pay higher interest rates than traditional savings or checking accounts, helping savings grow faster, as per the report. However, withdrawing money before the maturity date usually leads to a penalty that can reduce the earned interest or even affect the principal, as per the Yahoo Finance report.

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How to Use CDs to Prepare for a Layoff

Most CDs are federally insured up to $250,000 per depositor, per institution, per ownership category, as per the Yahoo Finance report. Services like CDARS can also help insure deposits beyond that limit, ensuring the funds remain protected, as per the report.

1. Lock in higher interest

Using CDs to store emergency savings can help take advantage of current interest rates, as per the report. The best CD rates now average around 4% APY, compared with a national savings account average of 0.41%, as reported by Yahoo Finance.

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2. Take advantage of interest income

The interest earned from a CD can either be reinvested or paid out regularly, as per the report. Some people choose to receive interest payments in a linked checking or savings account, which can help manage cash flow during a job loss, as per the Yahoo Finance report.

3. Create a CD ladder

A CD ladder involves dividing savings across multiple CDs that mature at different times, as per the report. For example, funds can be spread across CDs with terms of three, six, nine, and twelve months, as per the Yahoo Finance report. When one matures, the money can either be withdrawn or reinvested in a new CD, as per the report. This approach balances liquidity and higher returns, as per the Yahoo Finance report.

4. Consider a no-penalty CD

For those worried about early withdrawal penalties, a no-penalty CD allows withdrawals before maturity without extra fees, as per the Yahoo Finance report. However, these CDs typically have lower interest rates than traditional ones, as per the report.

FAQs

What is a CD in banking?

A CD, or certificate of deposit, is a savings account that locks in your money for a set term in exchange for a fixed interest rate.

Why should I use a CD after a layoff?

It helps you earn steady interest and keep your money safe while you figure out your next steps.