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. Cumulative inflation shows the real impact consumers continue to face. Bankrate found prices are more than 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, such as 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 in the next year from the Federal Reserve.
While that's unlikely, given the weak job numbers, inflation could prompt the Fed to continue its wait-and-see approach. 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 awhile — 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, as with a high-yield savings account, money market accounts come with variable interest rates. 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.
-
Your Medicare Costs Are Set to Soar: What to Expect Over the Next Decade
Medicare beneficiaries will face higher premiums, deductibles and surcharges starting in 2026 and continuing over the next decade. Here's what you need to know.
-
How Different Generations Invest and What They Can Teach You
Boomers, Gen Xers, millennials and Gen Zers are taking varying approaches to investing. Here's what they're doing and key lessons you can learn from them.
-
How to Navigate Your Finances After Losing Your Spouse: Thoughts From a Financial Planner
It's important you get involved in financial planning now so you're prepared and confident to make decisions when you potentially become your own financial manager.
-
The Five Best Cruise Lines for Retirees
Retirement is an ideal time for cruising. Check out the five best cruise lines for comfort, ease, and unforgettable experiences.
-
My First $1 Million: Oil and Gas Retiree, 67, Round Rock, Texas
Ever wonder how someone who's made a million dollars or more did it? Kiplinger's My First $1 Million series uncovers the answers.
-
Why Jerry Quits Ben & Jerry's: 5 Signs It May Be Time for You to Do the Same
After 47 years with Ben & Jerry's, co-founder Jerry Greenfield has stepped down. His decision highlights an important truth: sometimes it's not about waiting for retirement — it's about recognizing the signs that it's time to quit.
-
Amex Platinum Just Got More Expensive: $895 Fee and $3,500 in Perks Explained
American Express raises the Platinum Card’s annual fee to $895 and expands its perks. We break down the changes so you don’t have to.
-
Falling Interest Rates: What They Mean for Homeowners, Savers and Investors
As interest rates fall, homeowners may celebrate while savers feel the pinch. Here’s what the change could mean for your money.
-
Refinance Applications Surge as Mortgage Rates Tumble
The window to refinance is reopening as mortgage rates hit their lowest level in nearly a year. Here’s what the market shift means for homeowners.
-
Average Spending by Age for Those 55 and Up: Are You Thrifty?
Everybody has their own number for how much they’ll spend in retirement. See if your's is in line with the averages.