Interest rates on high-yield savings accounts have started to decline since the Federal Reserve’s September meeting and 50 basis-points cut to the federal funds rate. Thankfully, the best high-yield savings ಞaccount nationwide still pays 5.50% APY. How long that top rate will last is unknowꩵn. The Fed meets again in November, so there could be another rate cut at that time, which would impact interest rates on savings accounts, too.

During the National Association of Business Economics annual meeting in Nashville this past Monday, Federal Reserve Chair Jerome Powell indicated that the 澳洲幸运5官方开奖结果体彩网𝔉:Fed is in no rush to lower interest rates, considering recent eඣconomic data indicating that the economy is strong.

“We're looking at it as a process that will play out over some time, not something that we need to go fast on…it'll depend on the data,” Powell said.

However, it’s widely speculated that the Fed will lower rates again before the end of the year. Based on the CME Group’s FedWatch Tool at 3:30 p.m. Eastern today—this forecasts rate movements based on fed funds futures trading data—traders are putting the odds at a 99% chance that the Federal Reserve will cut its benchmark fed funds rate by 25 basis points at the next meeting on Nov. 6-7 (1% think the rate will stay the same, and 0% say a 50 basis point cut).

♍ So, if the Fed cuts rates againꩵ, what does that mean for your savings?

If the Fed Cuts Rates Agai🏅n, Savings Rates Coul꧂d Drop

The best interest rate available for a high-yield savings account from a nationally available institution is 5.50% APY from Pibank, with all of the best high-yield savings account APYs ranging from about 5.00% to 5.50% APY. This is nearly 12 times greater than the current 0.46% national average for savings accounts, according to the FDIC. Compa൩red wiꦯth 2021-2022, most savings account interest rates were less than 1.00% APY.

The 澳洲幸运5官方开奖结果体彩网:annual percentage yield (APY) is the interest rate earned on an investment in one year, including compounding interest (which is the ke🦩y difference between APY and interest rate). The more frequent the compounding and the higher the APY, the more money you’ll earn over time.

Here’s how much interest you could have earned over the past year if you had $20,000 deposited in a high-yield savings account, based on the top APYs currently 🧜offered by financial institutions. The interest earned is based on monthly compounding and no additional contributions:

If the Fed cuts the fed funds rate again, and savi🍌ngs account rates ꦦfollow, you could miss out on earning some interest in your account. For example, let’s say you lock in the top high-yield savings account rate now at 5.50% with $20,000 in your account. Between now and December 2024, you would earn $269.70 in interest. Then, the rate on the account drops to 5.00%. For the next nine months (January to September), you earn $745.57. That’s a total of $1,015.27, and $85.56 less than you would have earned in one year if the 5.50% APY never dropped.

Here’s how much you’d♍ miss out on in interest if your APY dropped even further and then held at the new rate for 12 months (based on $20,000 initial deposit and no monthly contributions, with interest compounding monthly):

If APYs drop in 2024 and again in 2025, you could miss out on over $200 in interest. Of course, the actual amount you'll miss out on will depend on your savings account deposit, current balance, interest rate, and more.

Thankfully, even if rates fall♕💟 closer to 4.00%, the APYs on accounts are still much higher than they were even just two years ago. In January 2022, the top savings account APY hovered at around 0.70%.

Earn As🎉 Much As Poss꧂ible While You Can With a High-Yield Savings Account or a CD

Despite rate cuts, you can still earn significant interest on your liquid cash by taking advantage of a high-yield savings account. If you haven’t opened one already, compare high-yield savings accounts with an APY ⛄of 5.00% or more and find one with no minimum required deposit.

If you’re looking to lock in a fixed interest rate, you may want to 澳洲幸运5官方开奖结果体彩网:consider opening a certificate of depꦆosit (CD). CDs pay a 🍌fixed rate that does not change for the duration of the term (such as six months, one year, or two years). That means you could lock in a high rate of 5.00% or more now and be guaranteed that interest rate until the maturity date (unless you withdraw your moneꩲy early and pay a penalty).

Consider all your savings options now to earn as much interest as possible before the next rate cut.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that's below $5,000.

Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, 澳洲幸运5官方开奖结果体彩网:read our full methodology.