From CBS News · Matt Richardson · · 1m 30s
Why savers should move cash this week
A Fed meeting, 4% rates and full access to your money make this a good week to open a high-yield savings account.
In brief
A Fed meeting, 4% rates and full access to your money make this a good week to open a high-yield savings account. Traditional savings pays under 0.40% while top high-yield accounts pay above 4%, and a likely rate hike this week could push them higher. Originally reported by CBS News.
The Fed meets this week
It's the first meeting since July, and CME Group's FedWatch tool puts the odds of a 25 basis point hike at 94.5%. Inflation has stayed sticky.
Traditional savings is losing
The average traditional savings account pays under 0.40%. Parking cash there while rates climb means giving up real money every month.
“keeping your money stored in a traditional savings account with a meager average interest rate under 0.40% simply isn't an option right now”
Variable rates cut both ways
High-yield accounts adjust with the market, so a rising rate environment lifts your return automatically. No paperwork, no reopening an account.
Banks move before the Fed does
Many banks raise their offers ahead of the formal announcement rather than waiting for it. Shopping around now can lock in a better rate timed to the meeting.
Returns are already strong
Top accounts hover at or above 4% today. Depending on your deposit, that's hundreds or thousands of dollars over the next year before any hike.
Your money stays liquid
Unlike a CD, there's no lock-up and no early withdrawal fee. Deposit and withdraw as usual if your situation changes. Online banks tend to offer the best terms.
The headline
Traditional savings pays under 0.40% while top high-yield accounts pay above 4%, and a likely rate hike this week could push them higher.
