The Federal Reserve met this week and issued its first rate cut of 2025. The Fed cut the federal funds rate by 25 basis points.
One of the reasons for the rate cut was concern surrounding the job market. The recent job reports show only 22,000 jobs were added in August, indicating companies are holding back on hiring until they see the full impact of President Donald Trump's tariffs.
And one way to stimulate job growth is through rate cuts, as it lowers borrowing costs.
From just $107.88 $24.99 for Kiplinger Personal Finance
Be a smarter, better informed investor.
Sign up for Kiplinger’s Free Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
When rate cuts happen, they also impact savers by way of lower APYs. However, even with the rate cut, these high-yield options can help you earn returns that outpace inflation.
How to cushion inflation
While you might not be able to withstand inflation's impacts directly, there are ways to cushion your money to reduce its effect. And one of the best options is a high-yield savings account.
A high-yield savings account allows you to earn a high rate of return. Unlike certificates of deposit, you can add money to these savings accounts at any time.
And you can withdraw or transfer those funds when you need them. Just be careful of any minimum balance requirements that might apply, or else your monthly fee might offset the interest earned.
Using this tool from Bankrate, you can see how rates currently measure up:
There are other considerations with a high-yield savings account. Chief among them is that they come with variable interest rates. If the Fed decides to cut rates again this year, your savings rates can drop too.
In the meantime, if you're looking for a flexible way to save money, it's hard to beat the rates offered. Here are some of the top yield savings accounts we recommend:
Account | APY | Min. opening deposit |
|---|---|---|
4.35% | $0 | |
4.30% | $500 | |
4.30% | $5,000 | |
4.25% | $0 | |
4.25% | $100 | |
4.25% | $1,000 | |
4.20% | $0 |
Use budgeting apps to meet savings goals
Sometimes, a fresh perspective on where your money goes helps you identify spending patterns, and with them, opportunities for more savings. Some of our favorite budgeting apps are easy to use, affordable and can help you meet your savings goals.
One of the easiest to use is Quicken's Simplifi.
The bottom line on high-yield savings accounts
The Fed cut rates for the first time this year. While that will lower the APYs you can earn, high-yield savings accounts help you earn a rate that shields your finances from inflation's impact.
Related content
-
Savings Goal CalculatorTools Want to know how much you need to save each month to reach your financial goals? Our calculator helps you build a realistic savings plan.
-
Cash vs. Mortgage: How to Pay for Your Second HomeShould you buy your second home outright or finance it with a loan? Weigh the pros, cons and tax implications before making the leap.
-
Savings Goal Calculator
Tools Want to know how much you need to save each month to reach your financial goals? Our calculator helps you build a realistic savings plan.
-
The Seven Best-Paying Side Gigs For RetireesIf you're worried you won't have enough saved for a comfortable retirement, or that life after work will be boring, these well-paid roles could be the answer.
-
$40,000 CD vs. $40,000 High-Yield Savings Account: 3 Things Savers Should Consider NowBoth options offer risk-free methods to grow your savings. Learn how much you can earn with each, how they differ and which one suits you best.
-
T-Mobile's Free iPhone 17 Deal: A Smart Switch or a Hidden Catch?Receive a free iPhone 17 when you switch to T-Mobile. We'll explain whether the deal is worth it.
-
How an Expired Passport Thwarted Blackmail (and What Other Important Documents You Should Keep)An optometrist produced his expired passport to foil a blackmail attempt by the daughter of a former employee. After proving he was out of the country on the date of a forged diary entry, he took it a step further.
-
Confused About the New COVID Vaccine and Medicare? What You Need to KnowGetting the new COVID-19 vaccine covered by Medicare isn't as easy this year as it was in the past. Here's what you need to know before you take a trip to your pharmacy.
-
How Digital Platforms Are Changing the Way You Invest in GoldInvesting in gold is easier than ever thanks to digital platforms. Learn how online tools are lowering costs, increasing transparency and making gold accessible to all investors.
-
This Is How Life Insurance Can Fund Your Dreams NowBeyond a death benefit, life insurance can provide significant financial value and flexibility through 'living benefits' while you are still alive, helping with expenses like education, business ventures or retirement.
