Group 1 - Certificates of deposit (CDs) are a popular investment option for generating income with minimal risk, where investors lock up cash for a set period in exchange for interest payments at an agreed annual percentage yield (APY) [1] - The average yields of 12-month CDs have climbed to 5%-6% due to the Federal Reserve's interest rate hikes in 2022 and 2023, making them appealing to investors [4] - The Federal Reserve has already reduced its benchmark rate three times in 2024 and once in 2025, leading to expectations of further rate cuts, which will decrease the attractiveness of CDs [5] Group 2 - As interest rates decline, income-oriented investors are likely to shift towards blue chip dividend stocks that offer higher yields than CDs, such as AT&T with a forward dividend yield of 4.3% [7] - Altria, focusing on smoke-free products, offers an even higher forward yield of 6.6%, making it an attractive alternative for income-seeking investors [9] - Investors locking up cash in CDs may miss out on more attractive investment opportunities as rates decline, potentially leading to suboptimal investment decisions [6][8]