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Why you should open a high-yield savings account before the Fed's April meeting

By opening a high-yield savings account now, savers can position their money to grow at a higher rate. Getty Images

For much of 2022 and 2023, there was a compelling case to be made for high-yield savings accounts. Rates on these accounts had surged, rising exponentially from where they were in 2020 and 2021, largely thanks to decades-high inflation and elevated interest rates meant to temper it. But as inflation steadily cooled last year (down from a 40-plus year-high in June 2022), it appeared that the benefits of opening an account would soon cool, too – especially if the Federal Reserve started cutting rates this spring and summer.

But the inflation reports for January, February and March have reset expectations. After inflation came in hotter, interest rate cuts have seemingly been tabled (at least for the time being) and interest rate hikes seem more possible than they did on January 1. Against this backdrop, then, and days out from the Fed's next meeting on April 30, some savers may again be considering a high-yield savings account again. Below, we'll detail three reasons why you may want to open one before the Fed's April meeting.

See how much more you could be earning with a high-yield savings account here now.

Why you should open a high-yield savings account before the Fed's April meeting

Here's why now may be a great time to open a high-yield savings account.

Rates could go higher

While the prospect of an interest rate hike following the Fed's next meeting is still unlikely, it's certainly more of a possibility than many had expected in recent weeks and months. One Fed official has already hinted at pausing rate cuts for the remainder of 2024 – and that was before the most recent, disappointing inflation report. 

But if rates do go higher – either in April or at the Fed's June meeting – savers with high-yield savings accounts will be in a prime position to earn more thanks to the variable rate nature of these accounts. If rates tick up, the rates on high-yield savings accounts will follow, allowing savers to grow their savings simply by transferring funds to this type of account.

Get prepared for potential rate increases with a high-yield savings account here today

Rates are already high

While the potential for rate increases is appealing, rates on high-yield savings accounts are already high right now. If you shop around online and are comfortable opening an account with an online lender (they usually offer better rates than banks with physical branches), you may be able to secure a high-yield savings account with a rate approaching 6% right now. That could quickly add up to significant earnings. 

So don't wait for an even higher rate that may (or may not) come. Take advantage of today's higher savings interest rates while they're still available. After all, at some point, this inflationary cycle will end and rates will come down. It makes sense, then, to earn today's high rates while you still can.

Your savings may not be keeping pace with inflation

Where do you keep your savings currently? If it's in a regular savings account then not only are you not keeping pace with inflation, but you're losing money versus what you could be making with a high-yield savings account. The average interest rate on a regular savings account right now is just 0.46%. But, as mentioned above, you may be able to get a high-yield account with a rate of 5.55% or higher

Considering that the inflation rate right now is 3.5%, only one of these two savings account options will realistically boost your bottom line. Just don't become complacent – or wait for the ideal rate scenario that may or may not arise after the Fed's next meeting. Instead, get started with a high-yield savings account now and start earning more money. 

The bottom line

With another Federal Reserve meeting just days away – and inflation still problematic for many – now may be yet another great time to open a high-yield savings account. By opening one of these accounts today you'll be positioned to earn an even higher return if the Fed raises rates again (thanks to the variable rate nature of the account). But you'll also start earning more on your money thanks to today's already-high rates. And you'll effectively offset some of the ramifications of today's inflation by opening an account earning more than a regular account – which is higher than today's inflation rate.

So don't wait. Open a high-yield savings account before the Fed's April meeting online now.

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