3 savings moves to make after the latest Fed rate pause
The latest interest rate pause from the Federal Reserve this week may not have been unanticipated, but for millions of American savers, it was a reminder to revisit their savings strategies. With interest rates remaining high, after all, and with the potential for an interest rate hike growing for when the central bank meets again in September, it's critical that savers offset today's higher borrowing costs as best they can. Add sticky inflation, elevated household debt and job concerns to the mix and this becomes even more critically important.
Fortunately, a higher Fed rate does benefit savers, even if it will remain an issue for borrowers. But it will require some work and effort on the part of savers to fully take advantage. Simply continuing your current savings strategy or leaving funds in a traditional savings account no longer suffices. So, what should you specifically do, then, to leverage today's rate climate as best as possible? Below, we'll outline three specific steps to take right now, after the fifth Fed rate pause of 2026.
Start by seeing how much interest you could be earning with a high-yield savings account here.
3 savings moves to make after the latest Fed rate pause
Not sure how to quickly improve your savings strategy after this week's Fed rate pause? Here are three moves that will help:
Close your traditional savings account
The average rate on a traditional savings account is currently 0.38%. That not only means that any money kept there is failing to keep pace with inflation but it also means that you're essentially losing money by not transferring all of your savings out of this account type and into one or more high-rate alternatives. The traditional savings account is obsolete in today's elevated rate landscape so close it as soon as you can and start earning more interest on your money elsewhere.
Explore the top CD account options available now.
Put some money into a CD account
A certificate of deposit (CD) account comes with an interest rate around 4% or higher now, easily outpacing the 3.5% inflation rate. And these rates are fixed, allowing you to budget with predictability and certainty, regardless of what happens in the overall interest rate climate during the CD's term. That said, you'll need to commit to locking your funds in the account until it matures – or pay an early withdrawal fee to regain access. So, while this can be a smart and lucrative home for your money, it doesn't make sense to transfer all of it into this account type, either.
Transfer the rest into a high-yield savings or money market account
Fortunately, there are two viable options for savers who can't afford to lock all of their money into a CD and who also still want to earn more than their traditional account offers. High-yield savings and money market accounts can both suffice. Both will allow accessibility as you can continue to make withdrawals and deposits as needed. And both come with rates near or above 4% now (savers are encouraged to shop around to find the highest rate option possible). Money markets even have check-writing features that will allow you to streamline your banking needs, should you want to avoid juggling multiple accounts at the same time.
The bottom line
A Fed rate pause, especially before a potential Fed rate hike, needs to be leveraged by savers as best as possible. Right now, that means closing a traditional savings account (if you haven't already), shifting some money into a fixed, high-rate CD and transferring the rest into a high-yield savings or money market account (or both). There's much more interest to be made in today's new rate landscape so savers should do their best to earn it while it's still readily available. Making these three moves right now will help them do just that.
