Who will win if the Fed raises interest rates?

after momentary pause In raising interest rates, it seems another hike is on the horizon. The Federal Reserve has hinted Another rate hike will happen After its upcoming July 25-26 meeting, the overall trend of rising rates we’ve seen over the past year resumes.

This is unpleasant news for many customers. When interest rates are high, borrowers pay more for everything from car loans to mortgages. Those with credit card debt also pay more. and with homeowners Adjustable rate mortgages Also watch their monthly payments increase.

However, there are some consumers for whom the news isn’t so bad — in fact, it could actually help them grow their finances. And, if you’re like many Americans, there’s a good chance you’re in this group.

You can benefit from higher interest rates by opening one of these high-yield savings accounts today.

Who will win if the Fed raises interest rates?

Borrowers may feel the pain of rising interest rates, but higher rates are an opportunity for savers Increase their savings rapidly. Because when interest rates are high, it costs banks more to lend money. To pad their cash flow, they try to attract new deposit customers at higher rates.

Chances are one of your financial goals is to save more money. And whether you’re able to put a lot or a little aside, high interest rates can help your savings multiply quickly. That’s why now is a great time to open a high-income account — or Switch to one If your account is not up to date with current offers.

How you can take advantage of higher interest rates

per Maximizing federal rate hikesThere are two simple things you can do today:

Open a high-yield savings account

High Yield Savings Account Acting like a regular savings account, they offer – you guessed it – high yields.

how much more The average savings account rate as of July 17, 2023 is 0.42%, FDIC. Today’s Top High Yield Accounts, by comparison, the offer rate is up to 5.05%. It is about 12 times more.

Over time, that extra interest can make a significant difference in your balance. And the only thing you need to do is to open an account. After that, you can just sit back and watch your earnings accumulate.

Check out current high-yield savings account rates here to find out how much you could earn.

Open a Certificate of Deposit (CD)

Certificate of Deposit, or CDs, often pay higher interest rates than high-yield savings accounts. In this case, Today’s highest paying CD Interest rate up to 5.48%.

The biggest difference is that with a CD, you agree to keep your money in the account for a predetermined period of time, known as duration. If you withdraw funds before the expiry date, you may be charged a penalty.

To make the most of high interest rates, consider opening one Short term CDs Which will be completed in three to 12 months. That way, you lock in today’s higher rate for the duration of the term, but if rates are higher in the future, you can renew the CD at that rate. You can create one CD ladder Enjoy this flexibility while potentially locking in even higher rates Long term CD Offer

See the most up-to-date CD rates here.

Bottom line

While rising interest rates are not generally considered positive for consumers, they can benefit those looking to earn more money from their savings. To maximize your benefit from any upcoming rate hikes, consider opening a high-yield savings account or CD (or both) and watch your savings grow.