Americans are experiencing interest rate hikes on variable mortgages, revolving credit card debt, and new home loans. But — apart from the intended consequence of Fed interest rate hikes helping to stem inflation — there is another, small silver lining: Your money in the bank may collect more interest.
By Dawn Allcot
Discover: Best High-Yield Savings Accounts More: IRS Is Raising Interest Rates July 1 — What Does That Mean for You?
High-yield savings accounts and certificates of deposit may see increased interest rates, though not immediately. Fortunately, any potential interest rate hikes on your credit card debt will also take time to appear, as companies need to provide 45 days notice before increasing rates or fees.
Peter Tanous, founder and chairman of Lynx Investment Advisory, told Forbes that banks react in different ways to interest rate changes. “They are slow as molasses to raise the rates they pay on deposits,” he said.
More From Your Money: Choose a high-interest saving, checking, CD, or investing account from our list of top banks to start saving today.
See: A Bear Market Can Benefit Investing Newbies – Here’s How Find: What Is the Longest Bear Market in US History?
The added interest you’ll collect on a savings account is unlikely to keep pace with double-digit inflation, however — or even offset the increased credit card interest rates you may experience if you carry a balance. Still, every additional dollar in your pocket counts when you’re saving for a rainy day, which is really the purpose of keeping money in an easy-to-access bank savings account.
