2 Savings Accounts to Consider if the Fed Raises Rates This September (and One to Avoid)
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TL;DR
- The Federal Reserve is close to issuing its first interest rate hike since 2023, with a significant chance of a 25-basis-point increase.
- A rate hike could lead to higher returns on select savings accounts, benefiting savers.
- High-yield savings accounts currently offer rates around 4.10% and their variable nature means they can increase with market conditions.
- Money market accounts offer a top rate of 4.00%, are variable, and provide check-writing abilities, unlike high-yield savings accounts.
- Traditional savings accounts have an average interest rate of 0.38%, which is much lower than high-yield or money market accounts and unlikely to outpace inflation.
- Savers are advised to research and shop around for the best rates on high-yield savings and money market accounts before opening one.