After the Fed Meeting, 7 High-Yield Savings Accounts Worth Your While
The Fed cut rates again at its December meeting. While it lowers APYs on savings accounts, these high-yield options still provide excellent returns.
The Federal Reserve met this week and issued its third rate cut of 2025. The Fed cut the federal funds rate by 25 basis points.
Why? In part, because job numbers have not been ideal; September had 119,000 jobs added, the highest in five months. Even with these additions, unemployment rose for the third consecutive month and now stands at 4.4%. One way to stimulate job growth is to cut rates, as they can reduce borrowing costs for companies.
When rate cuts happen, they also impact savers by way of lower APYs. I'll break down whether high-yield savings accounts are still a viable option, with declining APYs, and how much you can earn with one.
From just $107.88 $24.99 for Kiplinger Personal Finance
Become a smarter, better informed investor. Subscribe from just $107.88 $24.99, plus get up to 4 Special Issues
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.
Are high-yield savings accounts worth it when rate cuts happen?
Yes, a high-yield savings account remains a smart choice. While rates have dipped somewhat, with these accounts, you can earn up to a 4.35% APY with no account fees or minimum balance requirements.
This makes them smart options for short-term savings goals. If you're planning a vacation in a few months, for example, securing a higher rate now ensures you can meet your goal more quickly, without tying your money up in stocks or CDs.
Furthermore, a high-yield savings account is a wise way to build and maintain an emergency fund. You can set automatic transfers to pull from your checking to your savings to achieve this.
Here are my top picks of savings accounts now:
Account | APY | Min. opening deposit |
|---|---|---|
4.35% | $0 | |
4.10% | $100 | |
4.05% | $0 | |
4.02% | $500 | |
4.00% | $0 | |
4.00% | $1,000 | |
4.00% | $5,000 |
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.
When will rates drop? I've been reviewing APYs on CDs and high-yield savings accounts, and can tell you it varies by banks. While some have dipped rates slightly, others have not, giving you some time to maximize returns with higher rates.
You can use this Bankrate tool to find some of the best rates quickly:
How much can I earn with a high-yield savings account?
It depends on how long you plan to hold the money in the account and how much you want to deposit. Using our top choice, Newtek Bank, here's how much you can earn in a year with its current 4.35% APR:
- $5,000: You'll earn $222.29
- $10,000: You'll gain $444.57
- $25,000: You'll earn $1,111.43
- $50,000: You'll gain $2,222.86
Is it the best option for your savings needs? If you need quick access to your cash for a short-term purchase, then yes, a high-yield savings account will be the best fit for you.
However, if you have emergency savings fully funded and don't mind tying up your money for a short time, then the best CD rates offer you better protection from Fed policies because they come with fixed interest rates. Once you lock in a rate, you'll keep it throughout your term, even if the Fed decides to cut rates again.
Just remember that CDs require you tie up your money for the term you selected. So, if you don't want to restrict access to your cash, it's difficult to beat the flexibility a high-yield savings account offers.
The bottom line on high-yield savings accounts
The Fed cut rates for the third time this year. While that will lower the APYs you can earn, our top picks offer you returns that'll help you outpace inflation and reach your savings goals.
Related content
-
Stocks Extend Losing Streak After Fed Minutes: Stock Market TodayThe Santa Claus Rally is officially at risk after the S&P 500's third straight loss.
-
What Bilt Cardholders Need to Know as Wells Fargo Exits the ProgramA major shake-up in the Bilt Rewards program could affect your credit card, rent rewards and points strategy heading into 2026.
-
3 Major Changes to the Charitable Deduction in 2026Tax Breaks About 144 million Americans might qualify for the 2026 universal charity deduction, while high earners face new IRS limits. Here's what to know.
-
What Bilt Cardholders Need to Know as Wells Fargo Exits the Program
A major shake-up in the Bilt Rewards program could affect your credit card, rent rewards and points strategy heading into 2026.
-
Where to Stash Cash as Yields Fall, According to AdvisersYour best options depend on how soon you'll need the money and your tolerance for risk.
-
Should You Use Buy Now, Pay Later Options to Finance Your Vacation?Many travel companies are letting users pay in installments. But is "buy now, pay later" a smart financial decision?
-
I'm a Financial Pro: You Really Can Make New Year's Money Resolutions That Stick (and Just Smile as Quitter's Day Goes By)The secret to keeping your New Year's financial resolutions? Just make your savings and retirement contributions 100% automatic.
-
As We Age, Embracing Our Own Self-Doubt Can Be a Gift: A Cautionary Tale About Elder Financial AbuseAn aging couple hired a company that illegally required large deposits, and then they decided to stick with the company even after an employee stole from them.
-
7 Ways to Save Money on Almost EverythingHigh prices got you down? These strategies can help you reap deep discounts on everyday spending.
-
Do You Have a CD Maturing Soon? Here's What to Do NextThese strategies of what to do when you have a CD maturing soon will have you maximizing returns even with rate cuts.
-
How to Open and Maintain an Online Savings Account SafelyOnline banks offer generous APYs that most brick-and-mortar banks can't match. If you want to make the switch to online but have been hesitant, I'll show you how to do it safely.
