Earlier this week, the Federal Reserve announced its10th rate hikein an effort to rein in inflation.

The decision will increase the cost of borrowing, meaning everything frompersonal loanstocredit cardswill become more expensive.

And even if they stay the same, they’re still higher than they’ve been in recent years.

With the Fed raising rates again, interest-earning deposit accounts may get a little better, for now.

However, high savings rates will only hang around until the Fed decides to lower the federal funds rate.

“Once the Fed starts cutting, those rates will fall,” said Graff.

So where should you put your savings for now?

And is ahigh-yield savings accountstill worthwhile?

We’ll answer these questions and cover the best CD and savings rates available.

Meanwhile,three-andfive-year CD ratesremain lower than shorter terms.

Here’s a closer look at how much rates have changed in a week.

The FDIC averages include rates from traditional banks, which tend to have lower CD rates.

Average CD rates

Rates as of May 1, 2023.

Some banks are still raising rates – including Bask Bank and Bread Savings.

Others are keeping rates the same for now.

As for high-yield savings accounts, we shouldn’t expect rates to increase much, either.

“It depends on a number of factors like inflation, economic growth and interest rate policy.

“Keep in mind that savings rates can go the other way, too.

And if the economy has a downturn, it’s likely that rates would also come down.”

What happens when savings rates plateau?

As inflation cools, experts are still predicting arecessionin 2023 or 2024.

And the best way to get ahead of a recession is to prepare for the unexpected.

Keep in mind that high-yield savings and money market accounts have variable rates.

The first priority should be saving money you’ll need soon in a high-yield savings account.

For instance, you may keep money in a high-yield savings account ormoney market accountto keep some funds flexible.

you might also add ashort-term CDorTreasury bondto lock away money in exchange for a slightly higher interest rate.

Just be aware of any minimum balance requirements and withdrawal penalties if you better pull out funds.

You may also consider investing in the stock market, depending on your goals, added Ryan.

FAQs

What is a good CD rate right now?

The best CD rate you might get depends on the term and jot down of CD you want.

Most CDs are above 4% now, so shopping around for the best rate is best.

Some shorter-term CDs of one-year or shorter have better rates than longer terms.

Are savings account interest rates fixed?

No, high-yield savings accounts do not have a fixed interest rate.

Instead, the variable rate tends to move alongside the Fed’s moves – depending on the bank.

Should I have more than one savings account?

There’s nothing wrong with having more than one savings account.

You may have several accounts to stash savings, depending on your goals.