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
-
IRS Names Its First CEO: But He’s Also Still Running Social SecurityTax News Will this new role make it difficult to address emerging issues like budget and staffing cuts and customer service concerns?
-
Ohio Property Tax Shock: Why Your New Assessment Is So High (And What Comes Next)State Taxes Higher home valuations in Ohio have led to homeowner property tax relief. But is it enough?
-
Should You Replace Your Financial Adviser with AI?Financial Help Many people already ask AI for financial advice. But is it good enough to replace a human financial adviser?
-
Savvy Savings Moves to Make Now – Or You Could Lose ThousandsDespite a rate cut and inflation, these moves can still help you reach your savings goals quickly.
-
Escaping the New Golden Handcuffs: A Financial Expert Has a Plan for Today's ExecutivesFeeling stuck in your job? It could be your complicated compensation package, but it also could be where you live, your family or even how you view yourself.
-
A Comfortable Retirement is About More Than MoneyWhen it comes to a happy retirement, money can’t buy these things.
-
Four Ways a Massive Emergency Fund Can Hurt You More Than It HelpsSaving too much could mean you're missing opportunities to put your money to work. Redirect some of that money toward paying off debt, building retirement funds, fulfilling a dream or investing in higher-growth options.
-
Noctourism: The New Travel Trend For Your Next Trip"Noctourism" is a new trend of building travel and vacations around events and plans that take place at night. Take a look at some inspiring noctourism ideas.
-
Eight Tricks to Shop for Glasses if You're Over 50Shopping for glasses often gets trickier — and more expensive — as you age. If you've over 50, take these steps when you set out to buy a new pair.
-
My First $1 Million: Electric Utility Executive, 56, South CarolinaEver wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
