Already this year, the Fed has raised its benchmark federal funds rate from about 0% to about 1% in an effort to curb inflation. Rates will eventually peak and begin to fall. The greater the economic downturn, the faster rates will fall. Declines in Treasury yields have been the first indication of falling rates Banks and credit unions have generally been slower to react Banks and online credit unions continue to raise interest rates on certificates of deposit, especially since the Fed increased its rate on May 4 by 0.50%.
Fed rate hike tends to encourage banks to raise rates For similar low-risk investments, look for traditional and high-yield savings accounts, savings bonds, money market accounts, IRAs and 401 (k) s or investment accounts. One way to offset the impact on your wallet by higher rates is to ensure that your credit score is as high as possible, as banks and credit card companies offer lower rates to lower-risk customers with high credit scores. In addition, Treasury bills and notes have some tax advantages and may be easier to manage, especially in IRAs. With this online-only bank, you can open traditional CDs and IRAs, as well as savings and money market accounts.
