Are high-yield savings accounts still worth opening?
As the Federal Reserve ponders yet another interest rate hike, both savers and borrowers continue looking for ways to protect and grow their money. With borrowing costs elevated for everything from personal loans to credit cards to mortgages, it makes sense to limit how much credit you're using now. At the same time, there are some major incentives to deposit your money into high interest-earning accounts like high-yield savings and certificates of deposit (CD) accounts.
High-yield savings accounts, in particular, have been offering attractive returns for investors this year. But with additional rate activity possible for the end of the year, is a high-yield savings account still worth opening? Or should savers start exploring the alternatives? See what high-yield savings account rate you could get on your money here now.
Are high-yield savings accounts still worth opening?
The short answer to this question is yes, high-yield savings accounts are still worth opening today. But that answer could change in the months to come. That being said, high-yield savings accounts are generally still worth opening for all of the following reasons.
Rates are still high
Rates on high-yield savings accounts currently hover around 5.5%. That's many times more than what can be earned with a regular savings account, which sits at an average of just 0.45%. So, yes, it's worth opening a high-yield savings account today if only to start earning at that higher rate.
But the true benefit comes with acting quickly. Since rates on these accounts are variable, they're subject to potentially rise (or fall) in the near future. But by opening an account now, you'll be better positioned to both earn today's high APY and tomorrow's potentially even higher one.
Get started with a high-yield savings account now.
Rates could fall
While no one is predicting a dramatic rate cut for high-yield savings accounts, the long-term forecast isn't clear either. Some experts think rates on these accounts may have already peaked, while others think they'll stay in the range they are in currently.
But if the Federal Reserve hits its 2% inflation goal sometime in 2024, it's not unrealistic to think that interest rate cuts will soon follow, and that could result in significantly less earning potential for high-yield savings account-holders. It's worth it, then, to open an account now to earn as much interest before that happens.
The alternatives are limited
As mentioned, inflation and high interest rates have dramatically reduced the number of viable financial options for savers right now. CD accounts are generally still valuable, but savers who open those accounts will need to feel comfortable locking away their money for the full term or otherwise get penalized for an early withdrawal.
Money market accounts, meanwhile, could be valuable for some other savers. In general, however, as the interest rate on regular savings accounts already demonstrates, the alternatives are limited right now. That's why it's worth taking advantage of one of the few desirable options remaining.
Open a high-yield savings account here today and start earning more interest!
The bottom line
Due to their currently elevated interest rates, potential for rate drops in 2024 and the limited options left for savers, yes, high-yield savings accounts are still worth opening in October 2023. While rates on these accounts generally were not worth the deposit just a few years ago, they can be a reliable and safe way to protect and grow your money now. And in today's uneven economy, that's still an option worth exploring.
