Multiple Fed Cuts May Hit This Fall—But This One Move Can Protect Your Savings

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With Fed Cuts Expected, Savings Rates Will Likely Edge Lower

The Federal Reserve is meeting this week, and a rate cut looks all but certain when policymakers announce their decision Wednesday. After holding steady all year, the central bank is overwhelmingly expected to trim its benchmark interest rate by a quarter point, and futures pricing also points to additional cuts in October and December.

For anyone with cash in the bank, a ripple effect will travel quickly from the Fed to banks and credit unions, affecting the rates they’re willing to pay on savings, money market, and CD accounts. Right now, it’s still possible to earn strong returns in the 4% to 5% range with top high-yield savings accounts. But once the Fed begins cutting, those highs are bound to fade.

Some institutions may trim rates gradually after this week’s rate announcement and continue with incremental reductions if the Fed keeps easing, while others could slash your annual percentage yield (APY) more sharply in a single step. But while you can’t control how your savings account rate responds, you do have a smart way to lock in today’s higher payouts and keep them for months—or even years—no matter how much or how fast the Fed lowers rates.

That strategy is simple, widely available, and especially powerful right now.

The One Move That Can Keep Your Savings Rate Higher

Opening a certificate of deposit (CD) is the simple way to boost your savings return into the future. With Fed cuts expected ahead, a CD lets you lock in one of today’s high rates before it slips away. The best nationwide CDs currently promise 4.40% to 4.60% APY on terms from three to 12 months, while rate locks ranging from 18 months to five years are available in the lower-4% range.

The advantage of a CD is its rate guarantee. Unlike savings or checking accounts, where your APY can drop at any time, a CD locks in the rate you sign up for until maturity. That makes it a useful way to preserve today’s higher returns on at least part of your savings.

The key is matching the CD to your timeline. If you withdraw before the maturity date, you’ll face an early withdrawal penalty. Also, it helps to keep an emergency cushion in savings or a money market account so you don’t need to dip into your CD before it matures.

For Flexible Cash, a High-Yield Savings Account Is Still Worth It, Even If Rates Fall

For savings you want to keep accessible—whether as your main parking spot or alongside a CD—it pays to choose wisely. The Federal Deposit Insurance Corporation’s (FDIC) national average savings rate sits at just 0.40%, and many of the country’s largest banks still offer close to nothing. By moving your money to a top high-yield savings account, you can earn 10 to 12 times the national average.

In fact, dozens of high-yield accounts are currently paying in the mid-4% range, with some even reaching 5% when certain conditions are met. Our daily ranking of the best high-yield savings accounts includes more than a dozen options above 4.30% APY, many with no minimums, no fees, and no special requirements.

Though these accounts don’t lock in your rate the way a CD does, they provide the flexibility of instant access while making sure your money’s working hard for you. True, today’s best savings account rates are likely headed downward. But even after they slip, high-yield accounts will still deliver far more than the national average.

By pairing one of today’s high-paying CDs with a high-yield savings account, you’ll be able to boost your overall earnings—no matter what the Fed does—all while keeping some cash fully accessible.

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, read our full methodology.