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3 important things savers should do with inflation still hot
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The U.S. inflation report released Tuesday showed that consumer prices are still growing. The report points out that prices in January were 3.1% higher than they were one year earlier; economists expected consumer prices to grow at a 2.9% rate.
The current inflation rate plays a significant role in the returns you can earn on deposit accounts. That’s because when inflation is high, the Federal Reserve typically increases rates – or maintains high rates – in an effort to spur saving and hinder consumer spending. So, today’s news may be good for savers. That’s especially true for those who make wise moves in today’s high interest environment.
Take advantage of today’s high rates with a high-yield savings account now.
3 important things savers should do with inflation still hot
High inflation can be unsettling at the gas pump or the grocery store checkout, but savvy savers may welcome it. After all, high inflation rates likely mean that the Federal Reserve will keep interest rates on hold at 22-year highs – at least for the short-term. So, how can you get the most out of today’s high rates?
Open a CD
When you open a certificate of deposit (CD), you agree to keep the money you open the CD with in the account for its entire term. That could be anywhere from a few months to 10 years. In exchange for your willingness to keep your money in the account, the financial institution you open the CD with agrees to pay you a fixed interest rate throughout the account’s term.
So, if you open a 5-year CD with a 4.5% APY, you’ll earn a 4.5% annual yield on the money you deposit for the next five years – regardless of what happens with the inflation rate or the Federal Reserve. That’s important because some economists expect the Fed to start reducing interest rates as soon as May or June of this year.
These accounts typically come with FDIC or NCUA insurance on balances up to $250,000. And since most accounts penalize you if you access your money before the end of the account’s term, you’ll be less likely to tap into your savings, allowing your funds to grow uninterrupted.
Compare leading CD options now to lock in today’s high rates.
Open a high-yield savings account
Traditional savings accounts usually come with menial interest rates. According to the FDIC, the average savings account interest rate is just 0.47% – well below the 3.1% inflation rate. “If the return on an investment does not at least keep up with the rate of inflation, it will result in the loss of purchasing power over the long-term,” explains Krisstin Petersmarck, investment advisor representative at Bridgeriver Advisors.
At a 0.47% yield, the average traditional savings account is losing buying power at a rate of around 2.63% annually. A high-yield savings account may solve that problem.
High-yield savings accounts generally offer significantly higher APYs than their traditional counterparts. For example, the leading high-yield savings account options offer rates ranging from 4.35% to 5.25%. That means you can earn an inflation-adjusted return of between 1.25% and 2.15% with some of the best high-yield savings accounts.
As is the case with CDs, today’s high rates aren’t the only reason to open a high-yield savings account. These accounts usually come with FDIC or NCUA insurance on balances up to $250,000. Moreover, they typically make it easy to access your money, offering up to six withdrawals per month (though your financial institution may penalize you if you need access to your savings more than six times in any month).
Get started with a top high-yield savings account here now.
Reduce frivolous spending to allocate more to savings
Do you go to your local coffee shop and spend $4.50 every morning or eat your lunch at restaurants every day? These frivolous spending habits may seem insignificant, but they can cost you large amounts of money over time. For example, if you spend $1 per day to brew your coffee at home, you could save $3.50 every day. That doesn’t seem like much, but it adds up to $1,277.50 in savings per year.
When you cut frivolous spending habits like this out of your budget, you’ll be able to allocate more of your money to savings. So, look for opportunities like the example above to turn what looks like insignificant savings into a meaningful return to make the most of today’s high rates.
Find out how much you can earn with today’s leading high-yield savings account options.
The bottom line
Inflation is still hot across the U.S. So, you can expect to continue feeling the pinch at checkout. However, that also means high rates will remain so, at least for the near term – giving you the opportunity to earn meaningful returns with savings vehicles like CDs and high-yield savings accounts. As such, it may be wise to look for opportunities to reduce your spending and allocate more funds to deposit accounts that make the most of today’s high rates. Ultimately, “If your interest rate is higher than the inflation rate, you are in a good position,” says Petersmarck.
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Long before comic book characters dominated movie screens, actor Christopher Reeve made the world believes in superheroes with the 1978 classic “Superman.”
Reeve died in 2004, nearly a decade after an accident re-shaped his life. “Super/Man: The Christopher Reeve Story” is using interviews with family and friends and never-before-seen home videos to explore his real-life heroism.
Reeve started his career on the stage, studying at the prestigious Juilliard School and living with comedian Robin Williams. The pair had a friendship that was “more like a brotherhood,” said Reeve’s son Matthew. Reeve was in awe of Williams’ energy and versatility, Matthew Reeve said, but audiences quickly clued into Reeve’s own star power when he took on the role of the Man of Steel.
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To his children, though, he “was just dad,” Matthew Reeve said. The documentary explores how Matthew Reeve and his sister Alexandra Reeve Givens grew up watching their dad take the stage as Superman. “Super/Man” also reveals their heartbreak over their parents’ breakup and the joy they found when Reeve re-married. He tied the knot with Dana Reeve in 1992, and the pair welcomed another child, William Reeve, later that year.
“Dana was sunshine,” Alexandra Reeve Givens recalled. “She just brought joy with her wherever she was and could find it even in the darkest moments.”
Those dark moments came suddenly, when in 1995, a near-fatal horseback riding accident left Reeve paralyzed from the neck down. The documentary allows viewers to see, for the first time, what went on out of the public’s view. Reeve can be heard talking about how he “ruined (his) life and everybody else’s,” but in a touching moment, old friend Robin Williams is seen visiting him in the hospital.
“Robin showed him ‘Hey, you’re still you,'” Alexandra Reeve Givens said. “‘You still have this foundation of friendship and people around you, who adore you. And you’re going to find those fun moments in life again.'”
That support from friends and family re-ignited Reeve’s legacy of activism. He made appearances at the Democratic National Convention and the 68th Academy Awards in 1996, about a year after the accident. Matthew Reeve said watching his father address his industry peers at the Oscars was “one of (his) most proud moments.”
“It was just a production for him to get out of bed every morning, let alone get across the country and go out in public for the first time,” Matthew Reeve said. “It was a big deal. It was a big deal to him, but it was also a big deal to the entire disability community. We stayed up in London till like three in the morning to watch that live. It’s a fond memory.”
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Reeve also went on to launch what would become the Christopher and Dana Reeve Foundation, which is dedicated to advancing research into spiral cord injury and help individuals and families impacted by paralysis. It was his dad’s mission to find a cure, Matthew Reeve said, while his stepmother wanted to focus on improving the lives of paralyzed people and their families. The foundation and Reeve’s platform helped bring unprecedented attention and funding to spinal cord injury research.
Reeve even kept acting and realized his lifelong dream of directing with the 1997 HBO movie “In the Gloaming.” Reeve died in 2004 from heart failure at 52.
“There is a huge amount of great actors and actresses out there, where their filmography might be amazing and what they achieve on a cultural level might be amazing, but have they actually achieved anything really as a human that moves the needle for our society?” said filmmaker Ian Bonhote, who made the documentary with Peter Ettedgui. “And Chris has done both things.”
“Super/Man: The Christopher Reeve Story” will open in theaters on Friday, Oct. 11.
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