The Fed raises interest rates. Here’s how you can benefit now.

Federal Reserve announcement An increase in it Federal funds target rate range, this week. A 25-basis point increase brings the target range to 5.00% to 5.25%.

As with previous rate hikes, the Fed cited still-high inflation for its decision, and its downward target. Today’s inflation rate is 5.0% The target is below 2%.

“The US banking system is sound and resilient,” the announcement read. “Tighter credit conditions for households and businesses could weigh on economic activity, employment, and inflation. The extent of these effects remains uncertain.”

While higher interest rates mean loans, mortgages and credit are increasingly expensive, there are some benefits for your wallet. Namely, you can earn more from your savings soon. Today’s High Yield Savings Account Some cases already earn above 4% APY, and may mean higher federal interest rates Good savings rate is around the corner.

Compare today’s top savings rates now to find out more.

How you can benefit from rising interest rates

No matter how far along you are in your savings journey, high interest rates mean you still have time to take advantage.

“If the Fed raises interest rates, high-yield savings account rates will go up,” says Kathy Curtis, CFP and founder of Curtis Financial Planning. “So, a person with such an account will earn more from their savings.”

for this Choosing the Right Savings Account important to you; Not all banks raise the same rate. High Yield Savings Account You should look for rate increases to have the biggest impact. These accounts are primarily offered by Online Bank. With low overhead costs and plenty of competition, they are more likely to offer faster rates than larger, national brick-and-mortar establishments.

“I’m not sure if the brick-and-mortar banks will raise rates too much,” Curtis said. “Unless they realize that depositors are moving to higher yields. But, online high yield savings accounts will continue to offer them higher rates.”

The main part? You don’t have to wait until banks follow the Fed’s move and raise their own rates to take advantage. Savings account rates are variable, meaning your rate automatically adjusts when your bank changes the rate it offers. For example, if you open a savings account today with a 4.25% APY and your bank raises the rate to 4.30% next week, you’ll start earning that new rate on your balance going forward.

Explore high-yield interest rates here to see how much more you can earn

Why now is a good time to save

Higher interest rates may be a boon for savers, but you’re likely feeling the effects of rising interest rates throughout your finances. This is coupled with an increase in running rates Persistent high inflation And fear of recession Many people today are concerned about their financial future.

Beyond the boost you can earn with interest, protection from the unknown is one of the best benefits of saving today.

“There’s generally no better time than now to become more disciplined about saving for one’s future,” says Steve Schleupner, CFP, founder of U Tree Financial Planning. When you can save a larger portion of your earnings in an inflationary environment, he says, you can equip yourself to develop strong habits that will lead to long-term financial success. “The high rate itself is the motivating factor.”

contribution As much as you can Turning to your savings now can put you in a good position if you face financial hardship, or a loss of income Unexpected expenses In the future and the cost of borrowing is so high, saving more can help you avoid taking on high-interest loans that can cost much more in the long run.

Bottom line

The Federal Reserve’s latest interest rate hike may have consequences for borrowers, but there’s one sure way you can benefit: by saving money. Open a high-yield savings account A great way to increase your savings today with a competitive rate and take advantage of the high interest rates available to savers.

Learn more about today’s best savings rates now.