Finance
If you do not want to lose your savings in the face of inflation you should know these tips
Inflation began ticking up again in the final quarter of 2024 and two thirds of Americans don’t think their money sitting in the bank is keeping up.
Roughly two thirds of Americans are looking to scrimp and scrape in light of high interest rates in order to save money according to new research from WalletHub. The same proportion of those surveyed felt that the money they have tucked away in a banking account is not keeping up with inflation. Depending on what type of account they have, they are probably right.
Inflation began to tick up again in the last three months of 2024 reaching 2.9% in December. The average interest rate for a savings account was a paltry 0.41% according to the findings by WalletHub. However, there is a banking option that provides interest rates that surpass the current inflation rate but only about a third of Americans are taking advantage of it.
How to help your savings keep up with inflation
If you want your money in a bank account which will earn interest that outpaces the current inflation you should consider opening one with an online bank. According to WalletHub “online-only personal savings accounts provide the market’s highest interest rates, offering 3.57% on average, or 3.2X higher more than traditional checking accounts.”
Another option is to consider opening a high-yield savings account. Many of these types of accounts are offering interest rates around 4-5% as of December 2024. But keep in mind that these rates can fluctuate, so be sure to do your research and check the conditions, restrictions and any possible fees associated with the account.
Generally, most online-only and high-yield accounts are FDIC-insured, meaning that the agency insures deposits for up to $250,000 per customer account per bank.
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