Category Saving

In today’s uncertain economy, many people are rethinking where they keep their savings. With inflation rising to 2.9% in August—higher than what the Federal Reserve wants—interest rates could change, which affects how much money savings accounts can earn. A traditional savings account is considered a safe place to keep your emergency fund because your money is protected, usually by the FDIC. However, the interest you earn is low—often below 1%—which means a $10,000 deposit might only earn around $50 to $100 a year. Some people are now looking into higher-interest options, like high-yield savings accounts or certificates of deposit (CDs), to get better returns while still being cautious with their cash.

As of September 10, 2025, high-yield savings accounts are offering interest rates as high as 5.00% APY, which is much better than what many people were earning in recent years. These accounts have become a smart, low-risk way to save money, especially with ongoing inflation and uncertainty about the economy. The higher interest rates are largely due to the Federal Reserve hitting pause on cutting interest rates any further. While the economy still faces some ups and downs, this decision has helped savers grow their money faster. However, things could change depending on what the Fed decides at its next meeting, which could affect future savings rates.

Even after the Federal Reserve’s expected interest rate cut in September 2025, high-yield savings accounts are still a smart place to keep your money. While the Fed plans to reduce rates by about 0.25%, high-yield savings accounts continue to offer much better returns than traditional ones—averaging around 4.25% compared to just 0.39%. Experts say that any drop in high-yield rates will happen gradually, not all at once. So, even though returns may slowly decrease, these accounts remain a solid option for people looking for safety, easy access to their cash, and better interest than regular savings accounts provide.

Generation Z, people born between the late 1990s and early 2010s, are facing major challenges when it comes to saving for retirement. Despite being young and having time on their side, only about 18% of Gen Z have started contributing to a retirement account. This is worrying because starting early is one of the best ways to build wealth over time, thanks to something called compounding—when your money earns interest, and then that interest earns interest too. With rising prices, a shaky job market, and the future of Social Security in doubt, experts say young people need to start saving now to avoid financial trouble later in life. Even small, regular contributions to a 401(k) or Roth IRA can grow into a large nest egg over the years.

In 2025, Certificates of Deposit (CDs) have become a popular choice for savers looking for safe and steady returns. After the Federal Reserve cut interest rates three times in 2024 to support the economy, CD rates dipped but have since leveled off. Now, top CD rates are as high as 4.45% APY, making them one of the best options for earning interest without taking big risks. Banks like E*TRADE and Bread Savings are offering especially good short-term CD deals. Financial experts warn that if the Fed lowers rates again later this year, these good CD rates might not stick around. That’s why many people are locking in rates now to protect their money from the ups and downs of inflation and the stock market.

In 2025, many members of Gen Z are choosing to spend their money differently than past generations. Instead of saving up to buy a home, they are putting their money toward things that improve their everyday lives and reflect their personal values. This includes wellness subscriptions, fitness gadgets like the Oura Ring, stylish accessories, and even collectible sneakers and handbags that can be resold later. With high mortgage rates and an unpredictable economy, owning a home feels out of reach for many young adults. As a result, Gen Z is focusing on purchases that offer comfort, status, and flexibility now, rather than long-term investments like property.