To combat inflation, the Federal Reserve has raised interest rates 11 times since March 2022. As interest rates keep rising due to the Fed hikes, so do rates on high-yield savings accounts and CDs. At the most recent meeting in July, the central bank decided to increase rates by a quarter of a percentage point, bringing the federal funds rate to a target range of 5.25% to 5.5%, the highest level it's been in 22 years.
The Federal Reserve’s decision means that for most high yield accounts, you’ll likely see rates go up slightly. And if the Fed decides to raise rates again sometime in the coming months, expect the same. However, keep in mind that as inflation starts to cool, it’s a good idea to take advantage of savings rates while they remain high, as yields on CDs are expected to peak and then level off this year.
