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As inflation cools, is a high-yield savings account still valuable? Here’s what experts think
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Inflation is cooling, which means that there’s a chance that interest rates could come down soon. After all, the Federal Reserve may cut its target federal funds rate, which is the benchmark rate that consumer interest rates are based on, as price growth slows. And, if that happens, the rates being offered on savings accounts, certificates of deposit (CDs) and other deposit accounts could fall.
Chances are, though, that you want to earn the biggest return possible on your savings. And, since high-yield savings accounts typically come with variable interest rates that can change based on the Fed rate, you may be wondering whether or not these accounts are still valuable. Here’s what the experts have to say on the subject.
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As inflation cools, is a high-yield savings account still valuable? Here’s what experts think
Inflation may be cooling but prices are still up, and the inflation rate is still higher than the Fed’s 2% target rate. In turn, high-yield savings accounts may continue to offer strong returns, at least for now.
“Inflation may be cooling year over year; however, prices are still 20%-30% higher than they were 2-3 years ago,” says Aaron Cirksena, founder and CEO of MDRN Capital, a financial planning firm. “The Fed seems committed to keeping interest rates higher in the short term which means high-yield savings accounts are still a valuable tool.”
Strong returns aren’t the only reason to consider high-yield savings accounts, though. Liquidity is another benefit that you get from this type of account that you may not get from other savings options. With a high-yield savings account, you won’t need to lock your money up for a certain term or sell an investment to access cash.
“In my opinion, an account that is both liquid and provides a reasonable yield has its place within one’s financial plan,” says John Jones, investment advisor representative at Heritage Financial, a financial planning firm. “Whether you have a comfort fund, emergency fund, or significant planned expenses, many have a ‘Now Bucket’ that is invested conservatively and readily accessible when needed so that we can manage expected and unexpected financial situations.”
If you opt for a high-yield savings account, though, it’s important to ensure you can meet the requirements to earn the advertised APY.
“The key is to understand the requirements and restrictions high-yield savings accounts offer,” explains Krisstin Petersmarck, investment advisor representative at Bridgeriver Advisors, a financial advisory firm. “If you can meet them, then take advantage of the opportunity to make extra money on your savings.”
And, high-yield savings accounts are safe as long as you follow a couple of simple rules. One is to opt for an account that’s either FDIC- or NCUA-insured. Also, be sure the account balance is below the coverage cap, which is typically $250,000 per depositor, per account.
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Top high-yield savings accounts to consider right now
With high-yield savings accounts remaining a good option as inflation cools, you may be wondering what some of the top rates are right now. While the average savings account rate is just 0.45% currently — which includes both regular and high-yield savings account rates — many of the leading high-yield savings accounts offer rates that are over 10 times as high.
For example, the rates on many of the top high-yield savings accounts range from about 5.00% to 5.30% currently. And, while many have minimum opening deposit requirements, some start at just $0.01, meaning that as long as there’s money in the account, you’ll earn interest on the balance.
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The bottom line
Inflation is cooling — and interest rates could follow at some point in the future. However, high-yield savings accounts are still worthwhile for many savers. The yields on these accounts are still impressive, and when you combine those yields with the other benefits they offer, these accounts can have a place in a well-rounded financial plan. But, you should compare your options to make sure you’re getting the highest rate possible on the account that works best for you. Compare leading accounts now.
SPRINGFIELD, Ill. — The U.S. Justice Department is demanding records related to the July shooting death of Sonya Massey — an Illinois woman who was killed in her home by a sheriff’s deputy — as it investigates how local authorities treat Black residents and people with behavioral disabilities.
The government made a list of demands in dozens of categories in a letter to the Sangamon County Sheriff’s Office, dated Thursday.
“The Sheriff’s Office, along with involved county agencies, has engaged in discussions and pledged full cooperation with the Department of Justice in its review,” Sangamon County Sheriff Paula Crouch said Friday.
Sonya Massey, a 36-year-old Black woman, was killed July 6 when deputies responded to a call about a possible prowler at her home in Springfield, Illinois. She was shot three times during a confrontation with an officer.
The alleged shooter, Sean Grayson, who is White, was fired. He is charged with murder and other crimes and has pleaded not guilty.
“The Justice Department, among other requests, wants to know if the sheriff’s office has strategies for responding to people in “behavioral health crises,” the government’s letter read. “…The incident raises serious concerns about…interactions with Black people and people with behavioral health disabilities.”
Andy Van Meter, chairman of the Sangamon County Board, said the Justice Department’s review is an important step in strengthening the public’s trust in the sheriff’s office.
At the time of the fatal shooting, the Sangamon County Sheriff’s Office was led by then-Sheriff Jack Campbell, who retired in August and was replaced by Crouch.
Deputy Sean Grayson’s history of misconduct
Grayson has worked for six different law enforcement agencies in Illinois since 2020, CBS News learned. He was also discharged from the Army in February 2016 after serving for about 19 months. He was hired by the Sangamon County Sheriff’s Office in May 2023.
In an interview with CBS News in early August, Campbell said that Grayson “had all the training he needed. He just didn’t use it.”
In a recording released by the Logan County Sheriff’s Office, where Grayson worked from May 2022 to April 2023, a supervising officer is heard warning Grayson for what the senior officer said was his lack of integrity, for lying in his reports, and for what he called “official misconduct.”
Girard Police Chief Wayman Meredith recalled an alleged incident in 2023 when he said an enraged Grayson was pressuring him to call child protective services on a woman outside of Grayson’s mother’s home. He said Grayson was “acting like a bully.”
The recording and Meredith’s description of Grayson’s conduct showed how he quickly became angry and, according to documents, willing to abuse his power as an officer.
Sangamon County Sheriff’s Office history of accusations
According to a review of court records in 2007, Massey’s killing was the only criminal case in recent history against a Sangamon County Sheriff’s Office deputy for actions on duty. Local officials characterized her shooting as an aberration.
However, CBS News obtained thousands of pages of law enforcement files, medical and court records, as well as photo and video evidence that indicated the office had a history of misconduct allegations and accountability failures before Grayson. The records challenged the claim that Massey’s death was, as said by the then-sheriff, an isolated incident by one “rogue individual.”
Local families were confident that Massey’s death was the latest in a pattern of brazen abuse that has gone unchecked for years.
Attorneys for Massey’s family recommended an updated SAFE-T Act that would expand an existing database used to track officer misconduct to include infractions like DUIs and speeding during police chases.
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