Inflation's rising again. Here are 3 smart accounts to open now.

Interest rates are high at the moment. Though that may be a painful reality if you're interested in borrowing money or you have a significant amount of credit card debt, it can be welcome if you're focused on saving money for your future. And today's inflation data suggests that rates will remain high - at least for the time being. 

Today's high rates are the result of the Federal Reserve's decision to increase its target federal funds rate 11 times over the last two years in response to COVID-era inflation. Though some experts thought the Fed would start reducing its interest rate early in 2024, then later in 2024, those rate cuts seem to be getting pushed further and further off as stubborn inflation continues. 

Today's inflation data further validates the idea that interest rates will remain high for the time being. Prices were 3.5% higher than they were one year earlier in March, up from a 3.2% annual inflation rate in February and a 3.1% annual inflation rate in January. 

With prices continuing upward, it's becoming more important to protect the purchasing power of your money. And there are three account types savvy savers are opening now to do just that. 

Open a high-yield savings account now to take advantage of today's high returns. 

3 smart accounts to open with inflation rising

As inflation continues to push prices higher, it's important that you earn a meaningful return on your savings. Fail to earn at least a return that's equal to inflation and your cash will lose buying power over time. But some types of accounts offer higher returns than others. Here are three smart account types to open now against a backdrop of persistent inflation: 

High yield savings accounts

"A high-yield savings account is a good option because it allows the client flexibility and liquidity," explains Aaron Cirksena, founder of the financial planning firm MDRN Capital.

Like traditional savings accounts, most high-yield savings accounts come with FDIC or NCUA insurance on balances up to $250,000 and allow you to access your funds at will - usually at least six times per month.

The difference between a high-yield savings account and a traditional savings account lies in the return you earn on your money. According to the FDIC, traditional savings accounts offer an average APY of just 0.47%. On the other hand, interest rates on the best high-yield savings accounts typically range from 4.35% to 5.25%. So, while traditional savings accounts often produce an inflation-adjusted loss in today's inflationary environment, high-yield savings accounts can produce an inflation-adjusted gain. 

Earn a positive inflation-adjusted return with a high-yield savings account today. 

CDs

Certificates of deposit (CDs) are a strong option for savings you have that's more than what you may need for emergencies. That's because these accounts require you to keep your money in the account for its entire term. If you access your savings before the CD matures, you'll likely have to pay a penalty. But, there's a tradeoff to consider here. 

"A CD is a good option because it allows us to know exactly what rate we will get and for how long," says Cirksena. That's because CD accounts come with a fixed rate through maturity. 

So, while you generally can't tap into your money early, if you were to open a 5-year CD right now, you would lock in today's high interest rates for the next five years, regardless of whether or not the Federal Reserve cuts rates during that time. And with 5-year CD rates as high as 4.55% at some leading financial institutions, and short-term CDs offering even higher rates, this is another way to earn a positive inflation-adjusted return - even in today's inflationary environment. 

Money market accounts

"Don't be afraid to look at money market accounts at brokerage firms like Schwab and Vanguard as many of these are paying north of 5%," Cirksena says. One of the biggest differences between a money market account and a high-yield savings account is that money market accounts offer services similar to checking accounts - like the ability to write checks or use a debit card. 

However, it's important to consider the terms of the account you open before you regularly use these checking-like features. Money market accounts may also come with restrictions on how many times you can access your savings on a fee-free basis per month and minimum balance requirements to earn a meaningful return. 

Earn more on your idle cash with a high-yield savings account now. 

The bottom line

Inflation ticked up again in March, likely prolonging today's high interest rate environment. But that could be good news for savvy savers. After all, high interest rates mean you can earn a meaningful return on your cash if you open the right kind of account. Consider opening a high-yield savings account, CD or money market account - or a mix of the three - today to earn a positive inflation-adjusted return.