A Fed rate hike is looming. Take these three smart steps

After the welcome A pause in interest rate hikes Last month, the Federal Reserve was expected to resume raising rates when it meets again at the end of July. The benchmark rate is currently set at a range between 5% and 5.25% While no one knows for sure where the rate will go at the July meeting, many experts predict it will be at least slightly higher than that.

While higher rates make everything from mortgages to credit cards more expensive, there are some silver linings, especially for savers. That said, timing is of the essence, and savers need to act quickly and smartly to take advantage.

Start by exploring high-yield savings accounts to see how much more you can earn at today’s better rates.

Three smart moves before the next Fed rate hike

With interest rates expected to rise, these three smart moves may make sense.

Open a high-yield savings account

Manages high-yield savings accounts Just like a regular savings account does, albeit at a higher interest rate. Interest rate on regular account is 0.42%, as per FDICBut with a high-yield account, savers can earn more money faster.

There are some accounts offered online that generate income 11 times the national average. Interest rate on this account The variable, however, means that they will rise next week if the Fed raises rates. So by opening one now, you’ll be in a better position to take advantage of any increased rate activity.

Get started here now!

Wait for a CD to open

Certificate of Deposit (CD) account Currently offering Higher interest rates compared to high yield savings accounts. But those rates are locked in duration of the loan (unless you are willing to pay a penalty for withdrawing it early). So when you can get a great rate on a CD today, especially if you open one short term One, it’s better to wait a week until the Fed raises rates.

By waiting, you’ll qualify for a higher rate and not be locked in for a lower one. Or, you can Ladder is your CD And the rate increases when one opens now and the other.

Learn more here.

A mortgage rate lock

Bail rate They are significantly higher than they have been in recent years but, historically speaking, they are still relatively low. If you know you need to move — or want to have the option to buy in the near future — it might make sense to get one pre-approved And now a rate lock.

Although mortgage rates are currently around 7% (a long way from the 3% limit in 2020), this may still be a lower figure than what you could get if you wait until August to apply. While 0.25 percentage points month over month may not seem like much, it can add up to a significant amount on a 15- or 30-year mortgage.

Not sure if you qualify for a mortgage rate? Find out here now!

Bottom line

Interest rate hikes are generally poorly received due to the rising cost of borrowing. Still, there are some smart steps you can take in advance to ease the burden. By opening a high-yield savings account today, you’ll be in a better position to earn higher interest rates when they eventually rise. Similarly, you may want to pay the rate until the rise is official before opening the CD (or ladder your accounts to take advantage of both rates). Finally, those considering buying a home soon should strongly consider locking in mortgage rates before they inevitably tick up in late July.