3 savings moves to make post-Fed rate hike
Summary
The Federal Reserve has raised interest rates to between 3.75% and 4.00%, the first increase in over three years. This change means people who save money can now earn higher interest, but they should take specific steps to maximize their earnings.Key Facts
- The Federal Reserve raised the federal funds rate to 3.75% - 4.00%.
- Higher interest rates can lead to savers earning more on their accounts.
- Traditional savings accounts pay very low interest (around 0.38%) and are not ideal now.
- Moving money into high-yield savings accounts can increase earnings and offer flexibility.
- Certificates of Deposit (CDs) have fixed interest rates that are slightly higher but lock in money for a set time.
- Savers should use CDs carefully, avoiding locking in too much money or choosing terms they can’t complete.
- Money market accounts offer check-writing ability and interest rates close to high-yield savings accounts.
- Other options, like high-yield checking accounts, may also help take advantage of higher interest rates.
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