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As inflation cools, consider opening these 3 savings accounts right away
According to Wednesday’s latest report from the Bureau of Labor Statistics, inflation continued to cool in August. Now at 2.5%, the rate is just half a percentage point above the Federal Reserve’s target 2% goal. That reduction essentially guarantees that the Fed will cut its federal funds rate when it meets next week. Currently frozen at a range between 5.25% and 5.50%, many expect the Fed to drop the rate by 25 basis points to start – and possibly issue additional cuts when it meets again in November and December.
While those reductions will undoubtedly be welcomed by borrowers who have coped with higher rates on everything from credit cards to mortgages, they will be less beneficial for savers. While lenders don’t directly follow what they offer on savings accounts, a declining federal funds rate will cause returns on interest-earning vehicles to drop, too. And it will happen soon.
Understanding this, then, savers should make some proactive moves to take advantage while they still can. Below, we’ll detail three specific savings accounts they should consider opening now.
Start by seeing how much more you could be earning with a top CD here.
3 savings accounts to open while inflation cools
Here are three savings accounts to consider opening now, either individually or in combination with one another:
Certificate of deposit (CD) account
Rates on CDs are still high now. Depending on the term chosen you can potentially lock in a rate between 4% and 5% currently. And because of the way CD rates are structured, they’ll remain locked and the same until the CD has matured – regardless of any rate cuts that are issued during that time. That said, savers will lose access to their funds for the full CD term and may have to pay a significant early withdrawal penalty to regain access. And these rates will start to cool as rate cuts are issued and possibly even before then. So the window of opportunity to earn a competitive CD rate is closing by the day.
See how high of a CD rate you can lock in online today.
High-yield savings account
High-yield savings accounts may not come with as high as rates as CDs do, but they’re close, and savers won’t need to give up access to their money to earn that rate. That’s because high-yield savings accounts operate the same way traditional savings accounts do, just with a rate many times higher than the average 0.46% those latter accounts have now. Still, rates on high-yield savings accounts are variable and subject to change as the rate climate does. So you’ll need to be aggressive to start earning a high rate (and consider an online bank to secure as high a rate as possible).
Get started with a high-yield savings account online here.
Money market account
Money market accounts operate as a type of hybrid between savings accounts and checking accounts. You may be able to secure a higher rate with one of these accounts than a traditional savings or checking account, but to get it, you may need to meet a minimum deposit amount. Depending on the amount of your deposit — and the amount of money you maintain in the account — you may be able to secure a higher interest rate than you would with a lower amount. But rates on these accounts aren’t immune from the larger economic climate, so start shopping for money market accounts now if you feel that this is the best option for your money.
The bottom line
With inflation many times lower than it was in 2022 — and with the first cut to the federal funds rate since 2020 set to occur later this month — savers should be prepared to make some strategic moves right away. Whether that means opening a CD, a high-yield savings or a money market account will depend on your unique financial situation and long-term goals. Just don’t sit idle. These rates won’t be around for much longer, so take advantage of the opportunity while you still can.
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Tropical Storm Sara makes landfall in Belize after drenching Honduras
Tropical Storm Sara made landfall in Belize on Sunday as forecasters expect heavy rain to cause life-threatening flash flooding and mudslides.
The storm made landfall near Dangriga, about 55 miles southeast of the capital Belmopan, the Miami-based National Hurricane Center said.
This comes after Sara drenched the northern coast of Honduras, where it stalled since Friday, swelling rivers and trapping people at home.
One death was reported Saturday morning by Honduras Emergency Management, who also said that there have been at least 90 rescues and over 47,000 people affected by the storm.
The Hurricane Center’s tropical storm warning as of Sunday included Honduras’ Bay Islands as well as the country’s northern coast from Punta Castilla to its border with Guatemala; the Caribbean coast of Guatemala; Belize’s coast and northward into the coast of Mexico’s state of Quintana Roo, from Chetumal to Puerto Costa Maya.
The storm, which is moving at 6 mph, will continue to move inland over the Yucatan Peninsula and could drop up to 10 inches of rain across the area, with localized totals reaching 15 inches, through early next week. The conditions “will result in areas of flash flooding, perhaps significant, along with the potential of mudslides,” according to the Hurricane Center.
“A storm surge could raise water levels by as much as 1 to 3 feet above ground level near and to the north of where the center of Sara crosses the coast of Belize,” the center said Sunday. “Near the coast, the surge will be accompanied by large and destructive waves.”
Sara is the 18th named storm of the 2024 Atlantic Hurricane Season, which officially runs from June 1 until Nov. 30, with activity typically peaking between mid-August and mid-October. An average season brings 14 named storms, seven hurricanes, and three major hurricanes, according to the National Oceanic and Atmospheric Administration, which did predict the 2024 season would produce “above average” numbers.
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Gold pocket watch given to captain who rescued Titanic survivors sells for record price
A gold pocket watch given to the ship captain who rescued 700 survivors from the Titanic sold at auction for nearly $2 million, setting a record for memorabilia from the ship wreck.
The 18-carat Tiffany & Co. watch was given by three women survivors to Capt. Arthur Rostron for diverting his passenger ship, the RMS Carpathia, to save them and others after the Titanic struck an iceberg and sank in the north Atlantic on its maiden voyage in 1912.
Auctioneers Henry Aldridge and Son, who sold the watch to a private collector in the United States on Saturday for 1.56 million British pounds, said it’s the most paid-for piece of Titanic memorabilia. The price includes taxes and fees paid by the buyer.
The watch was given to Rostron by the widow of John Jacob Astor, the richest man to die in the disaster and the widows of two other wealthy businessmen who went down with the ship.
Astor’s pocket watch, which was on his body when it was recovered seven days after the ship sank, had previously set the record for the highest price paid for a Titanic keepsake, fetching nearly $1.5 million (1.17 million pounds) from the same auction house in April.
Auctioneer Andrew Aldridge said the fact that Titanic memorabilia has set two records this year demonstrates the enduring fascination with the story and the value of the dwindling supply and high demand for ship artifacts.
“Every man, woman and child had a story to tell, and those stories are told over a century later through the memorabilia,” he said.
Rostron was hailed a hero for his actions the night the Titanic sank and his crew was recognized for their bravery.
The Carpathia was sailing from New York to the Mediterranean Sea when a radio operator heard a distress call from the Titanic in the early hours of April 15, 1912 and woke Rostron in his cabin. He turned his boat around and headed at full steam toward the doomed vessel, navigating through icebergs to get there.
By the time the Carpathia arrived, the Titanic had sunk and 1,500 people perished. But the crew located 20 lifeboats and rescued more than 700 passengers and took them back to New York.
Rostron was awarded the U.S. Congressional Gold Medal by President William Howard Taft and was later knighted by King George V.
Madeleine Astor, who had been helped into a lifeboat by her husband, presented the watch to Rostron at a luncheon at her mansion on Fifth Avenue in New York.
The inscription says it was given “with the heartfelt gratitude and appreciation of three survivors.” It lists Mrs. John B. Thayer and Mrs. George D. Widener alongside Astor’s married name.
“It was presented principally in gratitude for Rostron’s bravery in saving those lives,” Aldridge said. “Without Mr. Rostron, those 700 people wouldn’t have made it.”
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