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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.
CBS News
Saturday is the winter solstice and 2024’s shortest day. Here’s what to know about the official start of winter.
The 2024 winter solstice, the shortest day of the year, happens on Saturday, Dec. 21, in the Northern Hemisphere. The celestial event signifies the first day of winter, astronomically.
What is the winter solstice?
The winter solstice is the day each year that has the shortest period of daylight between sunrise and sunset, and therefore the longest night. It happens when the sun is directly above the Tropic of Capricorn, a line of latitude that circles the globe south of the equator, the National Weather Service explains.
The farther north you are, the shorter the day will be, and in the Arctic Circle, the sun won’t rise at all.
How is the day of the winter solstice determined?
The winter solstice occurs because of the Earth’s tilt as it rotates around the sun.
When the Northern Hemisphere tilts away from the sun, the nights last longer. The longest night happens on the solstice because the hemisphere is in its furthest position from the sun. That occurs each year on Dec. 21 or 22.
This year, it falls on Dec. 21 at 4:21 a.m ET, to be precise.
On the summer solstice, when the northern tilt is closest to the sun, we have the longest day, usually June 20 or 21.
The solstices are not always exactly on the 21st every year because the earth’s rotation around the sun is 365.25 days, instead of 365 even.
Will days start getting longer after the winter solstice?
Yes. Each day after the solstice, we get one minute more of sunlight. It doesn’t sound like much, but after just two months, or around 60 days, we’ll be seeing about an hour more of sunlight.
When will winter officially be over in 2025?
The meteorological winter ends on March 20, 2025. Then, spring will last until June 20, when the summer solstice arrives.
How is the winter solstice celebrated around the world?
Nations and cultures around the world have celebrated the solstice since ancient times with varying rituals and traditions. The influence of those solstice traditions can still be seen in our celebrations of holidays like Christmas and Hanukkah, Britannica notes.
The ancient Roman Saturnalia festival celebrated the end of the planting season and has close ties with modern-day Christmas. It honored Saturn, the god of harvest and farming. The multiple-day affair had lots of food, games and celebrations. Presents were given to children and the poor, and slaves were allowed to stop working.
Gatherings are held every year at Stonehenge, a monumental circle of massive stones in England that dates back about 5,000 years. The origins of Stonehenge are shrouded in mystery, but it was built to align with the sun on solstice days.
The Hopi, a Native American tribe in the northern Arizona area, celebrate the winter solstice with dancing, purification and sometimes gift-giving. A sacred ritual known as the Soyal Ceremony marks the annual milestone.
In Peru, people honor the return of the sun god on the winter solstice. The ancient tradition would be to hold sacrificial ceremonies, but today, people hold mock sacrifices to celebrate. Because Peru is in the Southern Hemisphere, their winter solstice happens in June, when the Northern Hemisphere is marking its summer solstice.
Scandinavia celebrates St. Lucia’s Day, a festival of lights.
The “arrival of winter,” or Dong Zhi, is a Chinese festival where family gathers to celebrate the year so far. Traditional foods include tang yuan, sweet rice balls with a black sesame filling. It’s believed to have its origins in post-harvest celebrations.
Researchers stationed in in Antarctica even have their own traditions, which may include an icy plunge into the polar waters. They celebrate “midwinter” with festive meals, movies and sometimes homemade gifts.
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12/20: CBS News Weekender – CBS News
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A unique spin on the classic holiday eggnog
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