3 savings moves to make after the latest Fed rate pause
Summary
The Federal Reserve recently paused interest rate changes, which is a good time for Americans to review how they save money. Keeping savings in traditional accounts with low interest means losing money to inflation, so savers are advised to switch to higher-yield accounts, certificates of deposit (CDs), or money market accounts to earn more.Key Facts
- The Federal Reserve paused interest rate changes but may raise rates again in September.
- Traditional savings accounts have very low interest rates around 0.38%, which do not keep up with inflation.
- Certificates of deposit (CDs) now offer about 4% interest, higher than the current inflation rate of 3.5%.
- CDs require locking money for a set time but provide fixed rates, giving predictable earnings.
- High-yield savings and money market accounts offer rates near or above 4% and allow easy access to funds.
- Money market accounts often include check-writing features for convenience.
- Savers are encouraged to close traditional savings accounts and move money to better options to avoid losing value.
- Taking these steps can help savers earn more interest despite economic challenges like inflation and debt.
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