You'll Kick Yourself in the Summer if You Don't Make This Savings Move Now
These are the moves to make now while rates remain higher.
The Federal Reserve meets next week, and it might be good news for savers. After cutting rates three times last year, the Fed didn't cut rates at its January meeting and is unlikely to when it meets next week.
As such, it gives savers some breathing room to make smart moves while rates remain high. Even with the dips in APYs thanks to the rate cuts, you can still earn a healthy rate that outpaces inflation.
With this in mind, here are smart savings moves to consider, amid lower APYs and higher inflation.
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Inflation projections for 2026
February's inflation held at 2.4%. However, the Iran conflict is already raising gas prices by 20% nationally, and this will likely extend to other goods.
David Payne of the Kiplinger Letter noted it is the calm before the storm. He's projecting inflation creeping up to 3% by the end of the year due to tariff effects and rising health care costs.
With that in mind, savers need to find a solution that earns them a rate that outpaces inflation. I'll outline a few strategies to adopt.
Savings strategies to keep ahead of inflation
There are several ways to maximize your savings with rising inflation. The first is to lock in a long-term CD. CDs are market-resistant as they offer fixed interest rates.
It means if you choose a five-year CD and the Fed cuts interest rates in the future, the rate you have won't change until after your CD matures.
And some five-year CD rates are around 4%. Use the Bankrate tool below to find and compare CD options fast:
There's another benefit to a long-term CD. Mark Hamrick, a senior economic analyst with Bankrate, notes, "If opting for a multi-year rate is a sound option for you, one can avoid the situation where maturing short-term assets will need to be reinvested, possibly at lower rates down the road."
And he's right. A five-year CD allows you to earn a guaranteed rate of return with no work on your part. Moreover, if the Fed cuts rates again this year, as many economists project, now's the time to get one while rates are outpacing inflation.
The one thing to note about long-term CDs is that you can't touch that money. If you withdraw it before the maturity date, you're likely paying at least a year of earned interest, lowering your returns.
Short-term alternatives that offer flexibility
Long-term CDs should keep you ahead of the game, at least for the rest of 2026. However, they're also best for conservative savers or those nearing retirement, who want a risk-free way to grow their money without access to it.
That said, what if inflation exceeds expectations and you want the flexibility to pivot to more traditional investment strategies, such as mutual funds or a diversified stock portfolio, which offer higher returns and risk?
If this applies to you, then consider a no-penalty CD. No-penalty CD rates average around 4% and have a shorter maturity window, between six and 14 months.
The benefit of these is that you can still lock in a rate while they're higher, but you also have the flexibility to pivot to other investments quickly. That way, if the Fed cuts rates and prices continue to rise, you can find different solutions that maximize returns since this scenario will squeeze savers anyway.
The main consideration with no-penalty CDs is that once you fund them, you cannot access the money for at least a week, although some banks extend that to the first 30 days. Some also restrict withdrawals to once per month, while other banks allow you to take it all after the initial holding period.
However, if you're looking for a quick way to pivot, this could be a smart option as you won't feel the immediate impact of rate cuts. Regardless of which strategy you use, CDs can shelter your money from the rising costs of everyday items.
And with the Fed holding rates steady, now is the best time to take advantage of the higher rates while they're here.
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