The Federal Reserve meets on December 9-10, with many economists projecting another quarter-point rate cut.
When the Fed cuts rates, it impacts savers by way of lower APYs. However, it can take weeks to months for banks to lower rates, and even with a minor reduction, high-yield savings accounts will still earn a rate surpassing inflation.
With this in mind, here's why we still recommend a HYSA in the interim. We also present another risk-free savings option that'll help you maximize returns.
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Why it’s worth getting a high-yield savings account before the next Fed meeting
While opening a high-yield savings account before the next Fed meeting won’t lock in current rates, as the APY on these accounts fluctuates with the market, it’s still worth it to open one.
Why? Because the rates are still high. Our top choice, Newtek Bank, offers a 4.35% APY with no account minimums or fees. It's a great way to build an emergency savings, or for established savers to set aside money to meet short-term savings goals.
Compare rates on high-yield accounts by using the tool below, powered by Bankrate:
When to consider a CD account
Unlike high-yield savings accounts, CD accounts offer a fixed APY. This means that if rates go down after you've opened a CD, your earnings won't be affected.
If you're concerned about earning a lower rate of return, then it's wise to consider this over a high-yield savings account.
While opening a CD account can be a smart way to take advantage of high rates for as long as possible, there's one caveat: You'll need to make sure you don't make any withdrawals before the CD matures. Doing so will result in fees that can offset any interest earned (unless you have a no-penalty CD account).
The bottom line on high-yield savings accounts
Taking advantage of today’s high-yield savings and CD account rates can help you maximize your earnings. The Fed will likely cut rates when it meets soon, impacting how much you'll earn on savings.
However, even if you stick with a high-yield savings account, you'll still earn a rate outpacing inflation. And with CDs, you still have time to lock in the highest rate now, before they change.
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