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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.
Compare top-paying high-yield savings accounts now.
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.
Open a high-yield savings account to earn more on your money today.
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.
Open a leading high-yield savings account now.
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.
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Head of Russia’s nuclear defense forces killed in Moscow blast triggered by device hidden in scooter, officials say
Moscow — The head of Russia’s Nuclear, Biological, and Chemical Defense Forces, Lt. General Igor Kirillov, was killed along with his deputy early Tuesday in an explosion in Moscow, Russia’s Investigative Committee said.
An explosive device hidden in an electronic scooter went off outside a residential building as the two men left the structure, Agence France-Presse cites investigators as saying.
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“Investigators, forensic experts and operational services are working at the scene,” committee spokesperson Svetlana Petrenko said in a statement. “Investigative and search activities are being carried out to establish all the circumstances around this crime.”
ALEXANDER NEMENOV / AFP via Getty Images
The committee carries out responsible major investigations in Russia.
Kirillov was sentenced in absentia by a Ukrainian court on Dec. 16 for the use of banned chemical weapons in Ukraine during Russia’s military operation in Ukraine that started in Feb. 2022.
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Ukraine’s Security Service, the SBU, said it had recorded more than 4,800 uses of chemical weapons on the battlefield since February 2022, particularly K-1 combat grenades.
During the almost 3-year operation, Russia has made small but steady territorial gains to the nearly one-fifth of Ukraine it already controls.
Kirillov had been in his post since 2017, AFP notes.
A powerful earthquake hit the Pacific island nation of Vanuatu Tuesday, smashing buildings in the capital, Port Vila, including one housing the embassies of the U.S. and other nations. A witness told Agence France-Presse of bodies seen in the city.
Dan McGarry, a journalist with the Organized Crime and Corruption Reporting Project based in Vanuatu, told the Reuters news agency in an interview that police said at least one person had been killed and injured people had been taken to hospital.
“It was the most violent earthquake I’ve experienced in my 21 years living in Vanuatu and in the Pacific Islands. I’ve seen a lot of large earthquakes, never one like this,” he said.
The 7.3-magnitude quake struck at a depth of 35 miles, off the coast of Efate, Vanuatu’s main island, at 12:47 p.m. local time, according to the U.S. Geological Survey.
The ground floor of a building housing the U.S, French and other embassies had been crushed under higher floors, resident Michael Thompson told AFP by satellite phone after posting images of the destruction on social media.
“That no longer exists. It is just completely flat. The top three floors are still holding but they have dropped,” Thompson said.
“If there was anyone in there at the time, then they’re gone.”
Thompson said the ground floor housed the U.S. embassy, but that couldn’t be immediately confirmed.
A photo showed significant damage to the building:
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The United States has closed the embassy until further notice, citing “considerable damage” to the mission, the U.S. embassy in Papua New Guinea said in a message on social media. “Our thoughts are with everyone affected by this earthquake,” the embassy said.
The New Zealand High Commission, housed in the same building, suffered “significant damage,” a statement from Foreign Minister Winston Peters’ office said, adding that, “New Zealand is deeply concerned about the significant earthquake in Vanuatu, and the damage it has caused.”
Thompson, who runs a zipline adventure business in Vanuatu, said, “There’s people in the buildings in town. There were bodies there when we walked past.”
A landslide on one road had covered a bus, he said, “so there’s obviously some deaths there.”
The quake also collapsed at least two bridges, and most mobile networks were cut off, Thompson said.
“They’re just cracking on with a rescue operation. The support we need from overseas is medical evacuation and skilled rescue, (the) kind(s) of people that can operate in earthquakes,” he said.
STR / AFP via Getty Images
Video footage posted by Thompson and verified by AFP showed uniformed rescuers and emergency vehicles working on a building where an external roof had collapsed onto a number of parked cars and trucks.
The streets of the city were strewn with broken glass and other debris from damaged buildings, the footage showed.
Nibhay Nand, a Sydney-based pharmacist with businesses across the South Pacific, said he had spoken to staff in Port Vila who said most of the store there had been “destroyed” and that other buildings nearby had “collapsed.”
“We are waiting for everyone to get online to know how devastating and traumatic this will be,” Nand told AFP.
A tsunami warning was issued after the quake, with waves of up to three feet forecast for some areas of Vanuatu, but it was soon lifted by the Pacific Tsunami Warning Center.
Earthquakes are common in Vanuatu, a low-lying archipelago of 320,000 people that straddles the seismic Ring of Fire, an arc of intense tectonic activity that stretches through Southeast Asia and across the Pacific Basin.
Vanuatu is ranked as one of the countries most susceptible to natural disasters such as earthquakes, storm damage, flooding and tsunamis, according to the annual World Risk Report.
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Woman, 4 children deported for missing immigration hearing in Houston
Head of Russia’s nuclear defense forces killed in Moscow blast triggered by device hidden in scooter, officials say
Earthquake rocks Pacific island nation of Vanuatu, deaths feared, U.S. embassy damaged
Woman, 4 children deported for missing immigration hearing in Houston
Head of Russia’s nuclear defense forces killed in Moscow blast triggered by device hidden in scooter, officials say