Now's the time to take advantage of APYs as high as 5%. Skyhobo/Getty Images
Federal Reserve policymakers voted to hold interest rates steady today, pausing rates for the fourth time this year. In its postmeeting statement, the Fed summarized its findings by noting slightly elevated inflation and a low unemployment rate, though the economic outlook remains uncertain.
The latest decision means that households, which have been facing budget strains and increased living expenses, will continue to contend with high borrowing costs, from credit card APRs to mortgages. At the same time, anyone who is able to save money right now will continue to enjoy elevated returns on savings accounts and certificates of deposit.
If you want to maximize your earning potential before interest rates dip, you'd be wise to act now. The best high-yield savings accounts continue to offer APYs up to 5%, low fees and no minimum balance requirements. The best CD rates are as high as 4.50% APY. But these rates could go down in the coming weeks as banks brace for two rate cuts in 2025, the earliest as soon as September.
"This could be one of the last chances to grab a solid CD rate before they drop," said Taylor Kovar, certified financial planner and CEO of 11 Financial. "It might also be worth checking what your savings account is currently paying. There are still some decent options out there, but they might not last long."
Here's what you need to know about how the Fed's latest decision affects your savings and what you should do now to make the most of it.
Read more:The Fed's Interest Rate Decision Is Good News for Your Savings: Here's Why
How the Federal Reserve influences savings rates
The central bank meets eight times a year to assess the health of the US economy and vote on the federal funds rate, the rate banks use to lend and borrow money.
While the Fed's interest rate decisions don't directly determine savings rates, some banks set their deposit account APYs accordingly, though the changes can take several weeks or even months to take effect.
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