Are High-Yield Savings Accounts Still Outpacing Inflation?
Some savings accounts give you the ability to outpace inflation, lessening its impact on your finances.


Inflation continues to take significant bites out of household budgets. July inflation sits at 2.7%, the same as June's.
Food prices remain expensive, as beef prices have hit an all-time high, per Newsweek. And cumulative inflation shows the real impact consumers continue to face. Bankrate found prices are over 24% higher than they were in February 2020.
If you're feeling inflation's squeeze on your finances, you're far from alone. Thankfully, there are ways of cushioning your finances against inflation, and one of the best ways to achieve this is by placing your money in high-yield savings accounts.
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.
Do savings accounts really outpace inflation?
If you open a savings account at a brick-and-mortar bank, chances are you're going to be disappointed. Traditional savings accounts offer a 0.6% APY on average, making it far below inflation's 2.7% rate.
However, a high-yield savings account offers much healthier returns. Some of our top options, like this one from Newtek Bank, give you a return of 4.35%, well above the inflation rate.
Newtek Bank high-yield savings account
This account earns you 4.35% APY with no account minimums, allowing you to outpace inflation easily.
Another perk is that many high-yield savings accounts come with low deposit requirements and no monthly fees. This helps you keep more of your money, which is integral given inflation's impact.
How much can I earn with a high-yield savings account?
Let's take our top pick Newtek Bank, that earns 4.35% APY. Here's how much you would earn in one-year for opening the account today:
- $10,000 deposit: $435 in interest
- $25,000 deposit: $1,087.50 in interest
- $50,000 deposit: $2,175 in interest
- $100,000 deposit: $4,350 in interest
As you can see, this approach could help you earn significant gains effortlessly. This calculation assumes there will be no rate cuts over the next year from the Federal Reserve.
While that is unlikely, given the weak job numbers, inflation could prompt the Fed to continue its wait-and-see approach. And this is important because high-yield savings accounts come with variable interest rates, meaning that if the Fed cuts rates, it will also drop your rate of return.
What savings alternatives should I consider?
If you're worried about rate cuts eating into earnings, another approach is to open a certificate of deposit. Unlike HYSAs, CDs feature fixed interest rates.
It means if you lock in your rate now and the Fed cuts them later this month, it won't impact you since you have your rate locked in.
You can shop quickly for the best CD rates, using this tool, powered by Bankrate:
There are a few things to keep in mind with a CD. First, many come with terms that won't allow you to withdraw your money until it reaches its maturity date. If you need cash before that time, your penalties could be months of earned interest, negating its benefit.
You can’t add to your balance the way you would with a high-yield savings account, so CDs are best suited for a lump sum you won’t need for a while — letting you lock it into a risk-free vehicle that outpaces inflation.
Another option is a money market account. These are better-suited for established savers, as many accounts require a minimum balance of $1,000. In many ways, these accounts offer the best perks of checking, in that you can access your money anytime you want with a debit card.
Moreover, you'll gain all the perks of a savings account, including returns as high as 4.35%. This will also allow you to earn more money than inflation takes. However, like a high-yield savings account, money market accounts come with variable interest rates. So, if the Fed cuts rates sometime soon, it could lower your returns.
If you're on the fence about savings options, this table can help:
Savings vehicle | Cash access | Minimum balance requirement? | Best for? |
---|---|---|---|
High-yield savings account | Anytime you need it | Most online accounts don't have balance requirements | Savers looking to build an emergency fund or have cash access |
CDs | When your term ends, outside of no-penalty CDs | At least $500 | Established savers looking to shield money from rate cuts/inflation |
Money market accounts | Anytime you need it, though there might be restrictions on how often you can access it | At least $1,000 | Established savers looking for quick cash access |
Overall, there are several ways you can save money and stay ahead of inflation. High-yield savings accounts are the easiest, as they come with the fewest restrictions and only take a few minutes to set up.
Best of all, with rates as high as 4.35%, you'll earn a rate outpacing inflation, even if the Fed cuts rates and savings APYs drop. Therefore, if you're feeling inflation's squeeze, the right savings accounts can lessen its impact.
Related content
Profit and prosper with the best of Kiplinger's advice on investing, taxes, retirement, personal finance and much more. Delivered daily. Enter your email in the box and click Sign Me Up.

Sean is a veteran personal finance writer, with over 10 years of experience. He's written finance guides on insurance, savings, travel and more for CNET, Bankrate and GOBankingRates.
-
Help! My Car Was Totaled. Should I Repair and Keep Driving It or Buy a New One?
Does it ever make sense to keep a totaled car? Maybe, but you need to consider these factors first.
-
SPACs, SMRs and How to Invest in the Nuclear Insurgency
Big nuclear deployments are in process, but small modular reactors could be a better way to meet rapidly rising electric power demand.
-
Help! My Car Was Totaled. Should I Repair and Keep Driving It or Buy a New One?
Does it ever make sense to keep a totaled car? Maybe, but you need to consider these factors first.
-
10 Ways to Stay Safe From Grandparent Scams and Other Fraud, Courtesy of a Financial Planner
Scams are increasingly hard to detect, and anyone can be fooled, from older people to educated professionals. Here are 10 ways to avoid becoming a victim.
-
This Is How the Student Loan Bubble Is Primed to Pop, From a Student Funding Expert
Fueled by easy money, inflated tuition and high default rates, the student loan bubble mirrors the 2008 subprime mortgage crisis. We could be headed for a potential financial collapse. What can we do?
-
Amazon Ends Free Shipping Benefit Sharing with Non-Household Members
Starting October 1, Prime members will no longer be able to share shipping perks with those outside their household.
-
Market Fees Could Be Costing You — Here’s How to Avoid Them
Some money market accounts charge more than they earn. Here's how to spot costly fees and choose smarter savings options.
-
More Than Money: The Hidden Toll of Financial Abuse of Older Adults
Financial abuse from schemes involving tech support, government impostors, false sweepstakes, grandchild hoaxes and online shopping issues can cause thousands of dollars in losses.
-
I'm a Financial Planner: Here Are Three High-Impact Ways to Make a Difference With Your Dollars
The world often feels out of control, but here are three ways to use your money — through investments, charitable giving and political donations — to help create a more just and sustainable future.
-
The Unsung Hero of Aisle 5: A Tale of Forgotten Change and Compassion at the Supermarket
This supermarket manager went above and beyond to help when a child forgot her change at the checkout counter. You might be surprised at some of the complications that supermarkets face when it comes to customers' forgotten change.