Going through major life changes like layoffs can be difficult to navigate, especially if you don’t expect it and there is no financial safety net to get back to its original state.

Even if you have confidence in the safety of your job, it is by no means a bad idea to be prepared – especially now that layoffs are on the rise. According to a report by job placement firm Challenger, Gray & Christman, in March alone, U.S. employers laid off 275,240 jobs, a 205% increase from the same period last year. The federal government's layoffs accounted for 216,215 of them, thanks in large part to the shrinking efforts of the Department of Government Efficiency (DOGE).

Additionally, according to a recent survey by MyPerfectresume, more than 80% of workers are worried about losing their jobs this year.

If you do lose your job, keeping your cash flow and getting emergency funds to pay for your basic expenses is key. A Certificate of Deposit (CD) can help you do this.

A CD is a deposit account that allows you to lock in a fixed interest rate on your balance in exchange for money to save your deposit for a set time.

How it works: First, you deposit the one-time payment into your account at an agreed tax rate. You keep the money throughout the semester (maybe from months to years). Then, once the CD is mature, you can withdraw your principal balance and any interest earned.

One of the biggest benefits of CDs is that they usually pay higher interest rates than traditional savings or checking accounts. This allows your savings to grow faster.

Cons: If you need to get money before the expiration date, you will be subject to early withdrawal fines. This can eliminate the interest you have gained and, in some cases, even some principals.

Additionally, most CDs are insured by each storage, each depositor, each institution, and each ownership category. You can also use services like CDARS to secure a deposit of up to $250,000. This ensures that your cash is not at risk of theft, loss or loss - and that in the rare case of failure of your bank, your funds are protected.

Read more: Is it worth paying for early withdrawal of CDs?

If layoffs are made, it is important to have an emergency fund that can pay a basic fee for several months when looking for a new job. Of course, building an emergency fund takes time, so you need to start saving right away - just in case.

Additionally, keeping a portion of the emergency savings in the CD has some advantages. This is a way to strategically use CDs to prepare for layoffs.

If your emergency savings fund is not fully funded, leveraging today’s CD rates can help you increase your balance faster. In fact, today's best CD speed hovers around 4% APY (compared to the national average savings account rate of only 0.41%).

You have some options to handle CD earning interests. It is often common to reinvest your interest in CDs to complicate it. However, if you experience a cash flow tightening after layoffs, you may choose to pay you regularly.

Many banks and credit unions allow you to deposit CD interest into a linked savings or checking account. Rarely, you may be able to mail interest to you via check.

It is important to get some savings in a full savings account so that you can get the money at any time without a penalty. However, the CD requires you to keep the money you deposit for a certain amount of time. So, how do you take advantage of today’s CD rate improvements without giving up on your money?

CD ladders are strategies that balance higher yields with liquidity by distributing your savings in multiple CDs that mature at different time intervals. So the CD ladder delays maturity dates rather than locking all funds into a long-term CD and sacrificing all cash, so you will regularly regain access to a portion of the funds.

For example, you might spread your savings across multiple CDs over three months, six months, nine months, and one year. When the three-month CD is mature, you can choose to withdraw your cash or reinvest it into a new CD at the top of the ladder to keep the cycle (and potentially locking in higher interest rates).

If you are worried about an early withdrawal penalty, another option is to open a scale-free CD. These CDs allow you to withdraw money before the expiration date without the need to withdraw the penalty early. However, interest rates for untrained CDs tend to be lower than traditional CDs, so it is important to consider this trade-off before choosing an account.

Read more: How to open a CD account in 5 easy steps