Skip to content

Should I change banks to benefit from a better interest rate?

The Federal Reserve has signaled that more interest rate hikes are coming this summer. It is worrying if you borrow money. But if you’re a saver, that’s good news because it means earning more on the money you’ve parked in a bank.

Since the Great Recession, storing cash in a bank or credit union has almost felt like putting your cash in your mattress, given the miniscule interest rates financial institutions pay for funds in an account. current or savings.

Then high inflation hit. This had led the Fed to raise interest rates in an effort to dampen consumer demand and reduce inflation.

“Over the past two and a half years, interest rates went down and then inflation went up,” said Greg McBride, chief financial analyst at bankrate.com. “It’s the worst of both worlds for an investor. Now at least things are moving in the right direction. Interest rates are rising and the goal is to lower inflation.

If you’re following the tips for keeping a healthy emergency fund, you might be wondering if you should break up with your bank to get a higher rate on your savings. I spoke to McBride about issues savers should consider if they’re considering moving their money around for a better return.

Privacy Policy Designed using Magazine Hoot. Powered by WordPress.