The Federal Reserve is set to increase their interest rates.
It will impact your finances, especially your high-yield savings account.
Here’s what you should know
The Federal Reserve plans to raise rates to combat inflation. This will impact how consumers manage their finances. Click here to read more.
Costs may drop, but borrowing money will be more expensive. You’ll likely being paying more interest on expenses like credit cards or mortgages.
However, this works differently if you have a high-yield savings account. Essentially, you are earning money on your savings instead of paying money in addition to your debt.
High-yield accounts can pay 20-25 more in interest rates than a traditional savings account.
Typically, high-yield savings accounts are used as emergency funds for something like unexpected job loss.
It is important to remember that with these accounts:
- APY will adjust automatically
- Making a list of all savings could be helpful
- You could qualify for bonuses
If you don’t have a high-yield savings account yet, ask if the interest offered is tiered when you’re shopping around. This will earn you different amounts depending on what’s in the account.