Inflation has been a cause for concern for some time now. In fact, in mid-2022, the Federal Reserve increased its target federal funds rate for the first time since 2018 in response to high COVID-era inflation. Since then, it has increased its benchmark rate several times, pushing it to a 23-year high, where it still stands today. 

Though inflation seemed to be dwindling toward the end of 2023, price growth has gained a second wind with inflation coming in hot thus far in 2024. And while high inflation rates may make budgeting more difficult and debt more expensive, they can also make returns on deposit accounts more attractive. 

With the federal funds rate high, earnings on some deposit accounts can outpace inflation. As inflation persists, there are a few smart moves you could be making to make your money work harder for you. 

Compare leading high-yield savings accounts to earn a better return on your savings. 

3 savings moves to make with inflation still rising

Here are three savings moves you should make as inflation continues rising:

Open a high-yield savings account

Many of today’s high-yield savings accounts offer returns that are ahead of inflation – even as inflation rates head up. So, these accounts can help you produce a positive inflation-adjusted return on your savings. But, strong current returns aren’t the only reason why it’s wise to open a high-yield savings account right now. 

Increasing interest rates is the Federal Reserve’s go-to weapon against high inflation levels. So, if inflation continues to rise, the Federal Reserve could increase its target federal funds rate again. And, if you have money in a high-yield savings account, that may be good news. 

After all, the federal funds rate is a common benchmark for consumer interest rates. So, if high inflation levels lead to another federal funds rate hike, interest rates on high-yield savings accounts could head up, too. That means your earnings could increase ahead.

Find out how much you could be earning with a high-yield savings account today. 

Opt for short-term CDs

In today’s inflationary environment, one in which high interest rates have become the norm, returns on certificates of deposit (CDs) can be impressive. Leading CDs are offering returns over 5%. But, there’s a catch. You have to keep the money you deposit in the account until it matures. If you access your money early, you may have to pay a penalty. 

The good news is that you can choose to open a short-term CD. These CDs typically mature in one year or less. 

If inflation continues heading up, the Federal Reserve may increase rates. But, if you have your money tied up in a long-term CD, you won’t be able to benefit from those rate hikes. Choosing a short-term CD can give you liquidity (or the ability to access your cash) sooner. That means if rates increase ahead, your short-term CD may mature in time for you to take advantage of potentially higher returns. 

Open a high-yield checking account

Although high-yield savings accounts and CDs are compelling homes for your cash savings, they’re not the only high interest-earning account type to pursue today. A high-yield checking account could help. 

“High-yield checking accounts can be a good choice for some consumers, as they offer higher interest rates than regular checking accounts,” explains Cameron Burskey, senior partner at the financial planning firm, Cornerstone Financial Services. “If these align with your financial needs and usage patterns, they can be a valuable option for earning extra interest on your checking account balance.”

High-yield checking accounts are similar to traditional checking accounts in that they give you a safe and highly liquid place to store your daily spending money. But, the difference is in their yields. While many traditional checking accounts don’t offer returns, high-yield checking accounts offer returns as high as 4.62% right now.

And, since high-yield checking account returns are typically variable, they could rise if inflation continues rising. 

Compare today’s leading high-yield checking accounts now.

The bottom line

Inflation continues to come in hot despite the Federal Reserve’s attempts to rein in price growth. Should this continue, the Fed could increase rates further. But that could be good news for savers. 

If you want to make the most of today’s inflationary environment, it’s time to get strategic with your savings (and your checking) account. Consider opening a high-yield savings account and a short-term CD to house your savings. And keep your daily spending money in a high-yield checking account. By doing so, you’ll turn today’s high inflation rates into positive news by capitalizing on the earnings made possible by inflation and higher interest rates.

Joshua Rodriguez

Joshua Rodriguez is a personal finance and investing writer with a passion for his craft. When he’s not working, he enjoys time with his wife, two kids, two dogs and two ducks.