Interest rates edged higher after a brief pause in June. At least that’s what most experts predict when the Federal Reserve meets again later this week. When the Fed is goneThat rate is expected to move slightly higher after the July Fed meeting, with the benchmark rate at 5% to 5.25% in June. While higher rates make borrowing more expensive for everything from mortgages to credit cards, these higher rates have a big silver lining: the return savers can get on their bank deposits.
In particular, theAnd They are exponentially higher than just a few years ago. In short, if depositors choose to keep their money in a regular savings account . But exactly how much money are they losing? And, more importantly, how much savers can earn by transferring their money to one Instead?
Start exploring your high-yield savings account options here now to see how much more you can earn.
How much you can earn by depositing $1,000 in a high-yield savings account
Before committing any money to a high-yield savings account, you should first shop around and compare all your options. Different banks and lenders offer different rates and terms FDIC, is currently around 0.42%, although it could rise slightly following the Fed’s anticipated activity this week. Rates on high-yield savings accounts, however, multiply that figure with a range . Let’s see how much you can earn by depositing $1,000 in different ranges of accounts:Usually pays the highest rate. As per interest rate on regular account
- After one year with regular account at 0.42%: $1,004.20
- 4.50% after one year with high-yield account: $1,045.00
- 5.00% after one year with high-yield account: $1,050.00
The above figures do not take into account any compound interest but they also do not factor in any changes in rates. High-yield savings account rates are variable, meaning they will rise or fall based on Fed activity and any broader economic factors. All that being said, the more you deposit the more you will make. Here’s how much you’ll earn by depositing $5,000 instead:
- After one year with regular account at 0.42%: $5,021.00
- 4.50% after one year with high-yield account: $5,225.00
- 5.00% after one year with high-yield account: $5,250.00
Again, the key here is to shop around for rates to get the maximum return on your deposit. The higher the rate and the more you save, the more you increase your bottom line. Start earning more money now with a high-yield savings account here.
Don’t discount CDs, either
CDs are also offering higher than normal returns on deposits, so don’t discount the benefits of opening one of these accounts either. Interest rates on CDs are comparable to high-yield accounts, though you may be able to find a bit more, especially if you’re willing to open one.In today’s market. Just remember that CDs are locked in for the full term, so if you withdraw your funds early, you’ll pay a penalty (often interest that accrues to date). At the same time, CD rates are locked in for the entire term so if the rate environment changes during your term and rates tick up, your money will earn interest at that higher rate.
Learn more about your CD options here now.
High-yield savings accounts offer savers an easy and effective way to take advantage of higher interest rates. Although elevated rates make borrowing more expensive, savers can offset some of these costs by moving their money from a regular account to a higher-yielding account. Just be sure to shop around to discover the highest rates and best terms before opening an account — and don’t overlook the possibilities a CD can provide, even in today’s climate.