The Federal Reserve’s meeting may not be top of mind, but its decisions directly shape how much you earn on savings; and how much you pay to borrow. With the central bank expected to keep interest rates steady for now, current high returns on deposits are likely to remain in place through the summer. But with policymakers signaling possible cuts, acting ahead of those changes can help protect your earnings and strengthen your financial position.
One of the strongest moves right now is locking in a high APY with a certificate of deposit. CDs offer fixed returns for set terms, and top accounts currently yield up to 4.5%. Rates have already begun dropping across banks, and experts expect further declines once the Fed starts cutting. Financial planner Dana Menard notes that both CDs and savings accounts will likely offer less interest soon, making now an ideal time to secure higher yields if your money can stay put.
For emergency savings or funds you need accessible, high-yield savings accounts remain a strong option. Online banks continue offering rates that far exceed traditional accounts, though these variable APYs will likely fall after the Fed shifts policy. According to CFP Taylor Kovar, the high rates consumers see today are likely the peak for a while.
In a high-rate environment, delaying major purchases may save you money. Financing a car or other big-ticket item now means taking on elevated borrowing costs. Mortgage rates, meanwhile, remain high and are less sensitive to the Fed’s moves, so homebuyers should expect limited relief this year.
High-interest debt is also more expensive in this environment. Paying down credit cards and other costly balances frees up money for saving, investing, and essential expenses. Borrowers can also explore debt consolidation loans, preparing to apply if rates fall later this year for a chance at a lower APR.
While consumers can’t influence the Fed’s timeline for rate cuts, preparing now positions your finances to weather the shift. Lock in strong returns where possible, stay liquid where necessary, and reduce borrowing costs before new policy changes take effect.
