Inflation Is at 3.50%: These Savings Accounts Are Outpacing It
The latest CPI report shows inflation cooling, thanks to lower gas prices. Here are the savings accounts maximizing your returns.
The Bureau of Labor Statistics released its June CPI report, showing inflation dropped 0.4% for the month, the largest drop since April 2020. Year-over-year, inflation is up 3.50%.
Temporary lower fuel costs remain the primary catalyst for these trends. Core CPI remained unchanged, though the ongoing conflict in Iran threatens price stability.
The good news for savers is that with the slight dip, I found more savings accounts and CDs outpacing inflation. I'll show you where to earn the most based on your savings goals, what the inflation number means for Federal Reserve policy and other steps you should consider.
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These are the savings accounts outpacing inflation
If you are looking to build an emergency fund or have a short-term savings goal where you need cash access, I would consider a high-yield savings account, but look carefully at the rates, as many don't outpace current inflation.
Newtek Bank offers a savings account earning 4.20% APY with no monthly fees. This will keep you ahead of inflation in the interim.
The benefit of this account is that you build your savings without tying your money up as you would with a CD. Plus, if inflation begins to rise again, the Federal Reserve might issue a rate hike, which would mean the rate on a high-yield savings account would also adjust upward.
Will this inflation news change Fed policy?
Not in the interim, but momentum toward rate hikes could build again if gas prices rise. The Fed meets on July 28-29, with the CME Group FedWatch projecting an 87% probability they'll leave rates alone this time around.
That said, Cleveland Federal Reserve President Beth Hammack believes changes must come if inflation rises again. In a speech to the City Club of Cleveland on June 2, she said that monetary policy alone might not be enough to bring inflation down to the Fed's 2% target.
She added that if higher inflation becomes embedded in the economy, bolder moves, such as rate hikes, might be needed to help the Fed achieve its inflation target.
And this might be the trend we see play out. "Full normalization of energy costs could take well into 2027 because of extensive damage to energy infrastructure in the Middle East," writes David Payne, staff economist and reporter for The Kiplinger Letter, in the Kiplinger inflation outlook.
"Eventually, food prices will start rising, as one-third of the world’s fertilizer supply is produced in the Persian Gulf region." So, while the temporary drop in overall inflation is great, it might not last.
Are CDs a smart move right now?
Yes, they can be. I like short-term CDs right now because they can help you earn a rate higher than inflation. Plus, you can pivot to other investments if gas prices rise again.
It might also force the Fed's hand to raise rates. And this puts you in an excellent position to capitalize on them when your CD matures.
However, a long-term CD can work, too, if you're looking for a less risky venture to allocate some of your cash as you approach retirement. CDs offer guaranteed returns that won't change rates once you open one.
Here are some of the best CD rates I found:
Account | APY | Min Deposit | Term | Row 0 - Cell 4 |
4.00% | $1,000 | 3 months | Row 1 - Cell 4 | |
4.10% | $5 | 6 months | Row 2 - Cell 4 | |
4.10% | $1,000 | 1 year | Row 3 - Cell 4 | |
4.20% | $2,500 | 2 years | Row 4 - Cell 4 | |
4.05% | $500 | 3 years | Row 5 - Cell 4 | |
4.05% | $500 | 4 years | Row 6 - Cell 4 | |
4.15% | $2,500 | 5 years | Row 7 - Cell 4 | |
4.20% | $100,000 | 11-month jumbo CD | Row 8 - Cell 4 | |
4.00% | $1,000 | 9 months no-penalty CD | Row 9 - Cell 4 |
What should you do amid rising inflation?
First, make sure you have an emergency savings fund with at least six months of expenses in a high-yield savings account. I suggest using Newtek Bank in the interim since it outpaces inflation.
Once you reach your savings goal, I recommend investing more of your money in the stock market, where returns might protect your cash from inflationary pressures. Kiplinger Personal Finance Magazine recently released our annual feature on where to find top yields for the rest of 2026, and you can also take a look at our picks for the best Vanguard ETFs and highest-yielding dividend stocks in the S&P 500, for more liquidity.
And if you need help on where to invest your money, use this Bankrate tool to find a reputable adviser to assist you, as they can create a plan based on your finances, goals and risk profile:
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