Like temperatures, savings rates could start cooling off in September.
Temperatures aren’t the only thing that’s elevated this summer. Savings rates are sizzling too. That’s awesome news for anyone who wants to grow their money faster.
But, just like temps, annual percentage yields can’t stay high forever. The Federal Reserve is likely to keep rates where they are at its July 29-30 meeting, but it could begin cutting them in September. That makes now the time to lock in an APY up to 4.5% with one of today’s top CDs.
Read more: This Shockingly Simple Trick Doubled My Savings in One Year
Guaranteed earnings, in this economy? That’s hot
CDs aren’t exciting and they won’t make you rich overnight. But steady and predictable can be a good thing, especially in today’s economy, when people are scared to invest and nervous to spend. Stock market swings, tariff fallout and stupidly high prices are making savers run to safety.
When you lock up your savings into a CD for a set term and leave it untouched, your earnings are guaranteed. Your APY won’t drop even if overall interest rates drop. It’s a quiet, easy way to get a little extra cash, kind of like discovering a $10 bill in your jeans pocket every month.
Watch this: These Are the Safest Places to Keep Your Money Right Now
Why you shouldn’t wait to lock in your APY
The Fed has held rates steady at its last three meetings as it kept a close eye on economic factors like inflation and employment. Experts expect it will do the same at next week’s meeting. But it could begin cutting rates at its Sept. 17 meeting, which means banks will likely start cutting APYs too.
The Fed doesn’t directly impact savings rates, but banks tend to follow its lead. When the Fed cut rates three times at the end of 2024, banks slashed their CD and savings rates to attract new customers and avoid paying as much interest to existing customers. We’re already seeing rates fall across the banks we track at .
In other words, if you want to maximize your earnings, don’t wait too long to open a CD. The sooner you do, the better the APY you may be able to score.
Rather not lock up your cash? Consider a high-yield savings account
If you’d prefer to have ready access to your money, a high-yield savings account could be a better fit. Most CDs impose a penalty if you pull out your funds before the maturity date, but a HYSA is more flexible, allowing you to add deposits and withdraw funds as needed.
Some APYs on high-yield savings accounts are also in the 4% range, making them a better option over traditional savings accounts. But, unlike a CD, HYSAs have a variable interest rate, so your returns are less predictable.
