LINCOLN, R.I. (WPRI) — The Federal Deserve boosted interest rates this weak, making it more expensive for people to borrow money.
However, the high interest rates also mean people will finally see some good returns on their savings.
Donna Sowa Allard of Sowa Financial Group said people are much more cautious with their money and are looking into money market accounts, “certificate of deposit” (CD) accounts and high-yield savings accounts.
“A money market account is a deposit account when the money gets invested in very short-term treasures by the bank and you would get more yield on it,” she explained.
Sowa Allard said it is important to keep in mind that when the Federal Reserve decides to bring interest rates down — the rates on money market accounts will also go down.
Another option, she said, is a money market mutual fund.
“It is an investment so it doesn’t have FDIC insurance but it probably is the safest investment you can find,” Sowa Allard said.
A high-yield savings account is also another option. Sowa Allard said if people shop around online, they are likely to find interest rates around 4%.
“If this is money you don’t need for 12 months or 6 months you might think about putting it into a CD,” she said.