NEW YORK — The yield curve turned upside down in late December, leading some financial experts to suggest that consumers need to re-evaluate their saving and borrowing strategies in the new year.

Normally, long-term interest rates are higher than short-term rates because it's hard to predict what will happen far out in the future. But on Dec. 27, for the first time in five years, the yield curve "inverted" when the rate on 10-year Treasury securities dipped below the rate on two-year Treasury securities.

This has implications for people who buy Treasury bonds. They are asking, "Why should I tie up my money for a decade when I can get a better return investing it for just two years?"

There are also ramifications for consumers who are making saving and borrowing decisions, and they could persist well into 2006 if the Federal Reserve continues pushing up short-term rates while long-term rates hold steady.

Greg McBride, senior financial analyst at Bankrate.com said savers and borrowers "are on the opposite side of the table" when dealing with an inverted yield curve.

"That's because the borrower has every incentive to lock in rates for the long term, while the saver does not," he said.

Savers will find solid returns on short-term certificates of deposit, money market deposit accounts, money market mutual funds and high-yielding online savings accounts, McBride said.

One-year CDs are paying an average annual yield of 3.28 percent nationwide, according to Bankrate.com, and savers who invest in them will be able to roll their money into higher-yielding accounts when the CDs mature. A saver who ties up money in a five-year CD will get only a little more, 3.92 percent, and won't be able to take advantage of rising rates.

Borrowers, meanwhile, will benefit from locking in today's relatively low long-term rates, and from selecting fixed-rate loans over adjustable-rate loans.

Michael L. Moskowitz, president of mortgage lender Equity Now in New York, said that "fixed-rate mortgages, which are following the 10-year Treasury bond, are an outstanding value now."

According to the latest Mortgage Bankers Association survey, the rate on 30-year fixed-rate mortgages fell to 6.15 percent for the week ending Dec. 30, from 6.21 percent a week earlier. Meanwhile, the rate on one-year adjustable rate mortgages — which are tied to short-term securities — rose to 5.41 percent from 5.36 percent. Home buyers who select the adjustable-rate loans likely will face rising rates in coming years.