# What will a 5.55% high-yield savings account earn in 6 months?

As prices continue to rise at unexpectedly high rates, it's becoming increasingly challenging to save money. And, it's important that any money you have set aside produces a strong return. With the current annual inflation rate at 3.5%, earning a return that's any lower than that produces a loss of buying power.

So, if you have your savings in a traditional savings account (with an average 0.46% return) or in a safe (earning 0%), you're actually losing money. But a high-yield savings account can help.

With annual returns as high as 5.55%, as is the case when you open a My Banking Direct high-yield savings account, you could be earning a positive inflation-adjusted return. Though high-yield savings accounts typically have variable interest rates that will change over time, it can be difficult to ignore an opportunity to produce a safe, inflation-adjusted return in today's rate environment. But exactly how much money can you earn with a 5.55% high-yield savings account APY?

## What will a 5.55% high-yield savings account earn in 6 months?

The amount of money you'll earn on a high-yield savings account with a 5.55% APY in six months depends on the amount of money you deposit into the account - and what happens to that rate during this time period. Here's how much you'll earn on varying account balances, assuming the rate remains the same throughout:

• \$1,000 balance at 5.55%: You would earn \$27.38 (for a total balance of \$1,027.38 after 6 months).
• \$2,500 balance at 5.55%: You would earn \$68.44 (for a total balance of \$2,568.44 after 6 months.)
• \$5,000 balance at 5.55%: You would earn \$136.88 (for a total balance of \$5,136.88 after 6 months.)
• \$7,500 balance at 5.55%: You would earn \$205.31 (for a total balance of \$7,705.31 after 6 months.)
• \$10,000 balance at 5.55%: You would earn \$273.75 (for a total balance of \$10,273.75 after 6 months.)
• \$15,000 balance at 5.55%: You would earn \$410.63 (for a total balance of \$15,410.63 after 6 months.)
• \$20,000 balance at 5.55%: You would earn \$547.51 (for a total balance of \$20,547.51 after 6 months.)
• \$25,000 balance at 5.55%: You would earn \$684.38 (for a total balance of \$25,684.38 after 6 months.)

## Why you should open a high-yield savings account today

There are several reasons why opening a high-yield savings account could be a wise choice right now, including:

• Rates are high right now: High-yield savings account interest rates are significantly higher than traditional savings account interest rates - which in this case means your savings could produce an inflation-adjusted gain instead of an inflation-adjusted loss.
• Inflation persists: Inflation led the Federal Reserve to increase its federal funds rate several times over the past couple of years, sending that benchmark rate to its current 23-year high. That's good news for savers as a high federal funds rate typically means that savings interest rates are high, too. And, with inflation coming in hot in January, February and March, signs that a rate cut may come soon are dwindling.
• Variable interest rates: High-yield savings accounts have variable interest rates, which could be a bad thing if inflation and interest rates were falling. But with persistent inflation, those variable interest rates may be a welcomed feature. After all, the Federal Reserve's most effective weapon against inflation is increasing its federal funds rate target (the primary benchmark for consumer interest rates). So, if inflation continues to come in hot, future rate hikes could become a reality. That could send variable high-yield savings account interest rates up - expanding your potential earnings.

## The bottom line

A 5.55% high-yield savings account would earn anywhere from \$27.38 to \$684.38, or more, in six months, depending on the size of the balance you maintain in your account.

Regardless of the size of your balance, leading high-yield savings accounts can produce a positive inflation-adjusted return - a valuable feature in today's inflationary environment. And, if inflation persists, rates could rise, potentially increasing your returns. Open a high-yield savings account now to earn a meaningful return on your financial safety net.

View CBS News In
Be the first to know
Get browser notifications for breaking news, live events, and exclusive reporting.