Question: I’ve got $10,000 from my year-end bonus, and I want to keep it safe but still earn something. Is a CD or a money market account the smarter move?

Answer: It’s a natural question to ask right now. With your bonus in hand and interest rates slipping after the Fed’s rate cuts this year, deciding where to put that $10,000 can feel surprisingly tricky.

Certificates of deposit (CDs) and money market accounts (MMAs) remain two of the safest, most popular options. Both offer FDIC/NCUA insurance, both earn interest and both protect principal. But the best choice for your $10,000 depends heavily on two things: timeline and liquidity.

Let’s break down how these accounts work today, including updated earning tables, so you can choose the smarter home for your year-end bonus.

What’s the main difference between a CD and a money market account right now?

The main difference between a CD and a money market account right now is rate certainty versus rate flexibility. A CD locks in a guaranteed APY for a set term (anywhere from three months to several years). No matter what the Fed does next month or next quarter, your rate won’t change. That predictability is valuable in a declining-rate environment like the one we’re entering.

A money market account, however, has a variable rate. APYs can adjust up or down depending on market conditions and bank pricing decisions. For savers who want liquidity and the ability to move funds anytime, MMAs offer more flexibility.

How do liquidity and access differ?

CDs restrict access while money market accounts don’t. With a CD, withdrawing before maturity typically triggers an early-withdrawal penalty. That makes CDs better for money you know you won’t need for a set amount of time.

Money market accounts allow withdrawals and transfers as needed. While some banks impose monthly transaction limits, you can generally access your cash penalty-free, making MMAs ideal for near-term goals or emergency-adjacent savings.

Are both options equally safe?

Yes, as long as you stay within insured limits. Both CDs and MMAs are insured up to $250,000 per depositor, per institution, through the FDIC (banks) or NCUA (credit unions).

In terms of safety, they’re essentially identical.

How much a $10,000 CD earns at today's best rates

CD rates have drifted down slightly following recent Fed action. But some terms like one-year CDs remain competitive.

Earnings assume interest is compounded annually.

The biggest advantage here is the certainty: once you lock in a CD, the rate is yours regardless of economic shifts. If the Fed cuts again, as many expect, today’s 12-month yields may look unusually attractive compared with what banks offer three or six months from now. For savers wanting predictability, that’s a major benefit.

How much a $10,000 money market account earns right now

Money market accounts remain competitive even as rates cool, with many high-yield MMAs still offering around 4.25% APY. Because the rate is variable, earnings calculations below assume monthly compounding and no changes to APY over the period.

What stands out is the combination of liquidity and competitive returns. While a money market account can’t guarantee the rate won’t slip, it gives you significantly more flexibility.

Many banks also offer these accounts with low monthly fees, making them accessible for everyday savers. For short-term horizons, especially under nine months, today’s best MMAs earn slightly more than comparable CDs.

Use the tool below to quickly explore and compare some of today's top savings account offers:

CD vs. money market account returns compared

Below is how the two products compare head-to-head across common savings timelines:

Across most terms, the money market account slightly outperforms the CD, with the largest edge appearing over longer periods as compounding works in its favor.

The notable exception is the one-year CD, which is currently offering elevated rates that many analysts expect won’t last. If you’re attracted to locking in one of the last remaining CD terms with a “4-handle,” this is the window.

When a CD makes more sense

A CD is most effective when you value rate protection and you’re confident you won’t need to touch the money. For people with a fixed savings goal like an insurance premium due next year, a future home improvement project, tuition savings or wedding costs, a CD gives you exact, predictable earnings without requiring active management. CDs also make sense right before a rate-cut cycle.

Locking in a higher APY shields you from the declines we often see in variable-rate products after the Fed shifts its policy stance. If you’re someone who finds peace of mind in structured savings and guaranteed outcomes, a CD delivers clarity at a time when interest rates are in flux.

When a money market account makes more sense

A money market account is the better choice when liquidity or flexibility is your priority. This is ideal for savers who want their bonus accessible at any moment whether for emergency expenses, a home repair, a flight deal you can’t pass up or simply because you prefer not to lock up your cash.

While MMAs don’t guarantee the rate won’t drift lower, they still tend to retain strong competitiveness, especially in the online banking sector where promotional APYs remain plentiful.

If your timeline is short or uncertain, or if you’re looking for a place to keep cash while evaluating potential investment opportunities, an MMA lets you earn a solid return without sacrificing access.

How to decide between the two

The simplest way to choose is by assessing your timeline and your liquidity needs. If you know with certainty that you won’t need the money for at least 12 months, a CD may offer a slightly higher return with rate protection. If you’re unsure about your plans or may need access at any point, the money market account is the safer, more flexible pick.

You should also consider how sensitive you are to rate changes. If locking in a guaranteed APY brings peace of mind, that’s a strong argument for a CD. If you’re comfortable with the variability and you prefer being able to move money freely, an MMA offers the better balance of return and accessibility.

Final takeaway

If you’ve received a $10,000 year-end bonus, you’re entering 2026 with options. Both CDs and money market accounts are safe, federally insured, and deliver attractive yields compared with traditional savings accounts.

In today’s environment, the money market account typically comes out ahead for most time frames thanks to its liquidity and strong APYs, while the one-year CD remains a standout for its combination of guaranteed yield and rate certainty.

The right choice ultimately comes down to how soon you’ll need the money, how much flexibility you want, and whether locking in a rate before the Fed’s next move aligns with your financial strategy.

Related Content:

• Why a 5-Year CD is Your Best Bet After the Fed Meeting
• Best One-Year CD Rates
• Money Market Account vs High-Yield Savings Account

Whether you are a recent investor in I bonds, have owned them for many years, or are pondering adding them to your investment portfolio, you should be aware of the federal income tax rules.

I bonds have important tax advantages for owners. Interest earned on I bonds is exempt from state and local taxation. Also, owners can defer federal income tax on the accrued interest for up to 30 years.

These rules might seem simple at first. But they're not as straightforward as you think, and they can get complicated pretty quickly.

For example, the tax treatment of I bonds varies depending on who owns the bonds, whether you gift the bonds to someone else, and, in some cases, how the bonds are used. Following are descriptions of how and when I bond interest is taxed under federal law in eight common situations.

Note: For people who own EE bonds, the federal income tax consequences are identical to those of I bonds. So this story is also applicable to you.

1. Taxes when you are the bond owner

I bond buyers have a choice when they acquire the bonds. They can pay federal income tax each year on the interest earned or defer the tax bill to the end. Most people choose the latter. They report the interest income on their Form 1040 for the year the bonds mature (generally, 30 years) or when they're cashed in, whichever comes first.

However, deferring tax on the full amount of accrued interest for up to 30 years may sound like a great idea until you get the tax bill for three decades' worth of interest.

Also, taking the tax hit all at once can push you into a higher federal income tax bracket, making the tax bill even more expensive than it needed to be.

2. How to report and pay taxes when you cash in I Bonds or they mature

If you cashed in I bonds this year, you must report the interest on line 2b of your 2025 Form 1040 and pay tax to the extent you didn't otherwise include the interest income in a prior year. If you received $1,500 or more in interest during the year, you would also have to fill out Schedule B and attach it to your tax return.

If you keep the I bonds through the date they mature, generally 30 years, and you didn’t otherwise include the interest income in a prior year, you will be taxed on all the accrued but previously untaxed interest in the year of maturity, whether or not you cash them in. You would report interest income on your Form 1040 in the same manner as if you cashed in the I bonds.

If you are using the bond proceeds to pay for higher education, some of the interest may be exempt (see "Using I Bonds for Education" below).

3. Tax implications of co-owned I Bonds

For I bonds issued in the name of co-owners, such as a parent and child or grandparent and grandchild, the interest is generally taxable to the co-owner whose funds were used to buy the bonds.

However, that co-owner can choose to defer paying tax on the interest or report it annually. This is true even if the other co-owner redeems the bonds and keeps all the proceeds.

4. Gifting I Bonds: Tax rules when buying bonds for others

Savings bonds make great gifts. But if you buy I bonds for someone else, such as your children, grandchildren or any other person, the interest is reportable by that person, provided the bonds are titled in his or her name. Just like any other holder of I bonds, the recipient can choose to defer paying tax on the interest until the earlier of the year the bonds mature or are cashed in, or he or she can report the interest annually.

5. Gifting I Bonds you own

Gifting an I bond before maturity will accelerate taxation of the interest income. Giving away bonds you already own to someone else doesn't get you off the hook with the federal government for owing money on previously untaxed interest. If the bonds are reissued in the gift recipient's name, you're still taxed on all that interest in the year of the gift.

6. Donating I Bonds to charity

Donating an I bond before it matures to charity while you're alive will also accelerate taxation of the interest income. As with gifts to other people, giving away bonds you already own to your alma mater, favorite museum or other charitable organization doesn't let you avoid the tax on previously untaxed interest. You're still taxed on all that interest in the year the donation is made.

7. Inheriting I Bonds

If you inherit I bonds that haven't yet matured, who is taxed on the accrued interest that went untaxed because the original owner deferred the interest? It depends. The executor of the decedent's estate can choose to include all pre-death interest earned on the bonds on the decedent's final income tax return. If this is done, the beneficiary reports only post-death interest on Form 1040 for the year the bonds mature or are redeemed, whichever comes first.

If the executor doesn't include the interest income on the deceased owner's final federal income tax return, the beneficiary will owe taxes on all pre-death and post-death interest once the bond matures or is redeemed, again whichever is earlier.

8. Using I Bonds for education

One way to avoid paying federal income tax on accrued I bond interest is to cash in the bonds before or on the maturity date and use the proceeds to help pay for college or other higher education expenses for you, your spouse or your dependent. But there are lots of rules and hurdles to jump over to be able to take advantage of this tax perk. For instance:

• You must have purchased the bonds after 1989 when you were at least 24 years old.
• The bonds must be in your name only.
• The bonds must be redeemed to pay for undergraduate, graduate or vocational school tuition and fees for you, your spouse, or your dependent. (Grandparents can't use this tax break to help pay for their grandchild's college tuition unless the grandparent can, on their 1040, claim the grandkid as a dependent.)
• Room and board costs aren't eligible for the exclusion.
• The exclusion is subject to strict income limits. For 2025, it begins to phase out at modified adjusted gross income (modified AGI) of more than $149,250 for joint filers and $99,500 for other filers, and is fully phased out at modified AGI of $179,250 for joint filers and $114,500 for other filers. For 2026, it begins to phase out at modified AGI of more than $152,650 for joint filers and $101,800 for others and is completely phased out at modified AGI of $182,650 for joint filers and $116,800 for other filers.

If the proceeds from all savings bonds cashed in during the year exceed the qualified education expenses paid that year, the amount of interest you can exclude is reduced proportionally.

Use IRS Schedule B and Form 8815 to report and calculate any excluded I bond interest used for education.

Related

• Bond Basics: Investing
• How Are Inherited EE or I Savings Bonds Taxed?
• Types of Income the IRS Doesn't Tax

High inflation as of late means this is the fourth year in a row that the adjustments have resulted in a higher 401(k) contribution limit. But what about your IRA?

Here’s how much you can contribute to retirement accounts in 2026.

IRA 2026 contribution limits

The contribution limits for a traditional or Roth IRA increased last year and will increase again for 2026.

• You can contribute a maximum of $7,500 (up from $7,000 last year).
• Catch-up contributions for taxpayers 50 and older are also subject to cost-of-living adjustments, and these limits have also increased for 2026 to $1,100 ($8,600 total).

However, not everyone can make the maximum IRA contribution limits this year. You can only make the maximum contribution to your Roth IRA if your modified adjusted gross income (MAGI) is below the threshold set for the year.

• For 2026, single and head-of-household filers with a MAGI below $153,000 (up from $150,000 last year) can contribute the full $7,500 in 2026.
• The maximum contribution is reduced for these filers if their MAGI is between $153,000 and $168,000, and these taxpayers can't contribute to a Roth IRA at all if their MAGI exceeds $168,000.
• For married couples filing jointly, the income phase-out range for 2026 is from $242,000 to $252,000 (up from from $236,000 to $246,000 last year).
• Joint filers with a MAGI below $242,000 can contribute the full $7,500 for 2026, but these filers cannot contribute anything to an IRA with a MAGI greater than $252,000.

(Note: The above income limits do not apply to traditional IRAs.)

401(k) limit increase for 2026 contributions

Contribution limits for 401(k), 403(b) most 457 plans, and the federal government's Thrift Savings Plan will increase by $1,000 for 2026. Eligible taxpayers can contribute $24,500 to these accounts in 2026 (up from $23,00 last year).

The contribution limit for SIMPLE plans increases to $17,000 this year (up from $16,500 last year). Similarly, participants of an applicable SIMPLE plan might be able to contribute a higher amount of $18,100 (up from $17,600 last year).

401(k) 2026 catch-up limit

There's an increase in catch-up contribution limits for taxpayers 50 and older for 2026. These taxpayers will be able to contribute an additional $8,000 in 2026 ($32,500 total).

However, under SECURE 2.0, a higher catch-up contribution limit applies for those age 60 to 63 beginning this year. (Participants in that age range could contribute an additional $11,250 instead of $8,000.) The total potential contribution amount for these taxpayers is $35,750.

For more information, see Kiplinger's report: 'Super Catch-Up' Contribution for Ages 60-63.

The catch-up contribution limit for employees age 50 and older who participate in SIMPLE plans also has increased for 2026, to $4,000 (certain applicable plans might have a contribution limit of $3,850).

But under a new change under SECURE 2.0, those who are 60 to 63 can contribute more to SIMPLE plans, ($5,250) for 2026.

IRA deduction phase-out thresholds for 2026

If you put money in a traditional IRA, you might be able to take a tax deduction for some or all your contributions. (There is no deduction available for contributions to a Roth IRA.)

However, the deduction is gradually phased out if your income is above a certain amount.

Here are the phase-out ranges for 2026.

• For single taxpayers covered by a workplace retirement plan, the phase-out range is from $81,000 to $91,000 (up from from $79,000 to $89,000 last year).
• For married couples filing jointly, if the spouse making the IRA contribution is covered by a workplace retirement plan, the phase-out range is from $129,000 to $149,000 (up from $126,000 to $146,000 last year).
• For an IRA contributor who is not covered by a workplace retirement plan and is married to someone who is covered, the phase-out range is from $242,000 to $252,000 (up from from $236,000 to $246,000 last year).

If you are married and filing a separate return (and covered by a workplace retirement plan), the phase-out range remains from $0 to $10,000 because this limit is not subject to a cost-of-living adjustment.

Saver's Credit income limit for 2026

Americans with lower and middle incomes who contribute to a retirement plan can claim the Saver's Credit on their federal tax return, which could lower their tax bills.

However, not everyone qualifies. Here are the new income limits for claiming the Saver’s Credit in 2026.

• $80,500 for married couples filing jointly (up from $79,000 last year).
• $60,375 for heads of household (up from $59,250 last year).
• $40,250 for single and married taxpayers filing separately (up from $39,500 last year).

Read More

• 2026 HSA Contribution Limit: What You Should Know
• Saver's Credit: Who Qualifies for This Retirement Tax Break?
• New 2026 Income Tax Brackets Are Set

The immediate tax trade-off from an IRA to a Roth is relatively clear: With a traditional retirement account, you pay taxes when you take a distribution; with a Roth, you pay taxes now on the funds you contribute.

Converting to a Roth means you must pay the income tax on contributions in the year of conversion. Still, the potential tax benefits could be worth the upfront cost, especially if one of the following scenarios applies to you.

Here are six tax reasons you may convert your IRA to a Roth — and when you probably shouldn’t.

Roth IRA tax benefits

1. Get tax-free growth and withdrawals in retirement with a Roth

One major reason to convert your traditional IRA or 401(k) into a Roth is for tax-free growth. Because taxes are paid on your conversion upfront, all future qualified distributions are withdrawn tax-free, leading to significant trickle-down benefits.

• For example, once you reach age 65, you might have to pay Medicare’s income-related monthly adjustment amount (IRMAA). This amount is based on your modified adjusted gross income (MAGI). Because tax-free Roth earnings are excluded from your MAGI, you might avoid higher Medicare premiums on your retirement income.
• Other taxes, such as those on capital gains and the net investment income tax (NIIT), depend on your MAGI in the year of withdrawal. By withdrawing future earnings tax-free with a Roth, you might indirectly minimize or even avoid these taxes altogether.

Timing your Roth conversion is also important for maximizing tax-free growth. For example, you can convert to a Roth when the market is down and your IRA balance is temporarily low. This allows you to pay the tax on a smaller valuation, so when the market inevitably rebounds, your tax-free earnings might more easily recoup your upfront conversion tax bill (more later on conversion timings).

2. Set up flexible retirement income with Roths

Roth conversions from a traditional IRA account might also be ideal for those who want the final say in how they spend their retirement savings account income.

With a traditional IRA, Uncle Sam dictates when and how much you need to withdraw from your retirement account every year.

With a Roth, you’re not forced to take out a certain distribution during specific years, meaning you can freely avoid late-withdrawal penalties and flex your retirement account savings.

However, before your Roth IRA earnings become entirely tax-free and penalty-free, you must meet two requirements for a qualified withdrawal:

1. The 5-year rule. Your Roth IRA must have been open for at least five full years.
2. The age or life event rule. You must be at least 59½ years old, or the withdrawal must be due to disability, a first-time home purchase (up to $10,000), or death.

If you withdraw the earnings before you meet the rules above, that money could be subject to both income tax and a 10% early withdrawal penalty. But by flexing your retirement IRA distributions, you can make strategic withdrawals and help manage your taxable income, even lowering your federal tax bracket altogether.

Roth conversion timing

3. Take advantage of a low tax bracket with Roth accounts

The final months of the year are often the most popular time to execute a Roth conversion. Why? By late fall, most taxpayers have a firm grasp of their projected taxable income and, consequently, their federal tax bracket.

If you expect this bracket to be lower than the one you'll be in future years, converting your IRA to a Roth now could be advantageous. This strategic move allows you to lock in a lower tax rate and significantly reduce your immediate tax bill on the conversion.

If you're fortunate enough to have a lower tax bracket in 2025 than you anticipate in the future, here are the specific times and scenarios when converting your traditional IRA into a Roth might make sense:

• You’re not close to retirement. If retirement age is still 10 or more years away (and you expect to earn more in retirement), now might be a good time to convert your IRA to a Roth, so you can maximize your tax-free growth.
• You expect to live longer. Do you know any relatives who have reached their 90s and are still in good health? Required minimum distributions (RMDs) on traditional IRAs are calculated based on life expectancy tables, which might not fit your family’s expected lifespan. A Roth account offers lifetime tax-free savings, potentially providing a cushion of funds for many years.
• You’re retired and recently transitioned from married filing jointly to a single filer. Single filers generally have a lower income threshold for paying Medicare surcharges, making them susceptible to higher tax bills in the future. By converting to a Roth account, you can potentially avoid those higher tax brackets by preventing the Medicare surcharges on IRA distributions.

The most “ideal” time to convert to a Roth depends on a case-by-case basis, so consult a qualified tax professional before the conversion to see if it’s right for you.

4. Avoid RMD taxes with a Roth IRA

Retirees are likely already familiar with the concept of a RMDs. But if you’re new to the retirement game, here’s the scoop:

• RMDs are money that must be withdrawn from your 401(k), 403(b) or traditional IRA every year after you reach a certain age (right now, that’s likely age 73).*
• Failure to make the withdrawal typically results in a 25% penalty on the amount not distributed.

RMDs can increase your taxable retirement income in a variety of ways. For instance, they can raise the taxable portion of your Social Security benefits by increasing your provisional income or pushing your taxable income into a higher federal tax bracket.

A key advantage of converting to a Roth IRA is the lack of RMDs during the original owner’s lifetime.

Because Roth accounts typically don’t have RMDs, you might be able to avoid taking distributions from your Roth during years of high taxable income, while withdrawing more funds tax-free during low-tax years. This is particularly ideal for high-earners who anticipate higher tax rates in the future.

*Note: If you are 73 or older at the time of the conversion, you must first take your RMD from your traditional IRA in the year of the switch.

Retirement and Estate Planning for Roths

5. Start a Roth IRA after you retire to avoid future high tax rates

If you’re newly retired, now might be the optimal time to convert your 401(k), 403(b) or other traditional IRA into a Roth. Your tax bracket might be lower than it's been while you were working, and you’re not yet taking Social Security or are required to take an RMD (which can push you into a higher tax bracket).

This retirement “sweet spot” is when federal tax rates are at their lowest, which might help create a couple of ideal scenarios for a Roth conversion:

• For instance, if your pension or annuity hasn’t kicked in yet, now might be a great time to convert your traditional IRA or 401(k) while taxable income is low.
• If you plan to receive a large lump sum from an employee stock ownership plan (ESOP) or other retirement investment, converting to a Roth now could save you future taxes when your taxable income is higher.

As reported by Kiplinger, some financial planners also speculate that the changes made in the Trump/GOP 2025 tax and spending bill have placed taxpayers in “one of the lowest-income-tax environments in history.” If that applies to you, consider converting now to a Roth before future tax rates potentially increase.

For more information, check out Kiplinger’s report on Timing Roth Conversions.

6. Give tax-free assets as inheritance to your kids with a Roth

Withdrawals from a traditional IRA or 401(k) are always taxable, no matter who’s taking the funds. Unfortunately, that means your kids could pay the price if you leave them your IRA.

That’s where another tax advantage of converting your IRA into a Roth comes in handy: Your heirs could inherit those funds income tax-free.

Not only that, but inherited Roth earnings continue to grow tax-free, meaning your heirs have more flexibility on when to withdraw.

However, your nonspouse heirs generally have to withdraw all funds from an inherited Roth within 10 years of your death (this also applies to traditional IRAs and is commonly referred to as the 10-year rule). Once more, inherited Roth IRAs have RMDs for some heirs (such as children), though spouses who inherit a Roth might not be subject to RMD rules.

For more information on the 10-year rule and inherited Roth accounts, check out Kiplinger’s report, Inherited an IRA? Key Distribution Rules to Know for 2025.

When you shouldn’t convert to a Roth

Although we covered six tax reasons for converting your IRA to a Roth, there are times when a Roth conversion can be financially detrimental. Here are a few scenarios when you wouldn’t convert a traditional IRA to a Roth.

• You expect your 2026 income tax rate (or later) to be lower (or the same). If you think your future federal tax rate will be lower than your current rate, you might not want to convert a traditional IRA to a Roth, as doing so would mean paying higher tax rates later.
• You have to use IRA funds just to pay the conversion tax bill. Since the Roth conversion tax is due upfront, you must pay it immediately. If you're forced to use the IRA funds themselves to cover the tax bill, that withdrawal becomes taxable and could trigger an early withdrawal penalty (if you're under 59½). This might significantly diminish your retirement savings and undercut the primary benefit of the Roth: Tax-free growth.
• You need to use the converted funds within five years. If you’re under 59½, you can’t use your funds for five years after a traditional IRA to Roth conversion. Otherwise, you could be subject to a 10% early withdrawal penalty. (Yet if you’re older than 59½, you might withdraw the funds penalty-free before the five years are completed, though any earnings on those funds will be subject to income tax.)
• You’re retiring soon. If you’re retiring within the next five years, your Roth account will not have a lot of time to grow tax-free, so you might not want to convert your IRA into a Roth. Otherwise, your upfront conversion tax bill might never be recouped.

Deciding if and when to convert your traditional IRA to a Roth account should be part of a comprehensive tax strategy that considers your various income streams and retirement time horizon.

For example, converting to a Roth might seem like a good idea for generating tax-free growth, but the increase to your taxable income in the year of conversion could have ripple effects. Higher taxable income might preclude you from claiming tax breaks that you’re eligible for, such as the tip tax deduction or $6,000 bonus deduction for older adults.

You don’t have to make an IRA to Roth conversion all at once. You can decide to minimize the impact of your conversion taxes by spreading out a Roth conversion gradually, if at all.

Ultimately, Roth conversions are irreversible: Exercise caution. Once you’ve made one, you’re stuck with the upfront tax bill and the Roth account for a lifetime.

Read More

• Roth IRA Contribution Limits for 2025
• 10 Retirement Tax Plan Moves to Make Before December 31
• The Rubber Duck Rule of Retirement Tax Planning
• 3 Ways High-Earners Can Maximize Their Charitable Donations in 2025

What causes this long-term loyalty? One reason is that switching bank accounts, especially checking accounts, can be complicated. You must update direct deposits and change every automatic bill payment you make. As a result, many people prefer not to go through the hassle of switching.

But is this loyalty costing you opportunities to earn better returns? This is where the trend of "soft switching" comes in.

Soft switching means trying a new bank while keeping your current one, with the option to close the old account later. This is something I know well because I did it, but before you rush to it or write it off, you should understand the benefits of soft switching and what to consider before making the change.

How I used soft switching to reach my goals

I was a big-bank customer for more than a decade, but as I was building up my savings, I found their interest offerings to be less than adequate. I was only earning a fraction of interest on my account holdings, so I explored the best high-yield savings accounts offered by online banks, which provided substantially higher annual percentage yields (APYs).

Instead of closing my big-bank accounts and transferring all my money to SoFi, the bank I wanted to try out, I opened a high-yield savings account (HYSA) with SoFi and left my old accounts open. From there, I set up automatic transfers from my old checking account to my SoFi savings every time a direct deposit was made.

The result? I was earning hundreds of dollars more annually with my SoFi high-yield savings account. After months of higher returns, I decided to open a checking account with SoFi as well, since it made accessing cash in my HYSA easier, and their checking account came with a 0.50% APY. From there, I closed my old big-bank accounts, completing the switch.

Why do people switch bank accounts?

If you're trying to make your money work better for you, switching bank accounts can be the smarter move in some instances. Say you have $10,000 in savings with your local bank, earning 0.02%. In the course of a year, you'll earn $2 on that account.

That's not optimal. Instead, if you take that $10,000 and open a high-yield savings account with Newtek Bank, you'll receive an APY of 4.35%. In the course of a year, you'll earn $444.57, giving you an extra $442.57 just for switching bank accounts.

Higher rates aren't the only reason people switch. Here are others:

• You've had bad experiences with your bank (high fees, poor customer service)
• You want access to better features (improved mobile app capabilities, responsive customer service)
• Avoiding fees, as some local banks offer accounts laden with them
• You want to take advantage of savings account bonuses
• You moved to a new city and don't want to use your old bank account
• Access to other accounts (CDs, money market accounts) with better returns

Reasons switching banks might not be a wise move

Switching might not work in certain scenarios. If you rely on a local branch to assist you with banking, then going to an online bank takes away that in-person help. For some, having that help is necessary to keep finances in line.

Another reason is that "soft switching" bank accounts requires considerable attention to detail. Until you make a full switch, you'll continue to manage multiple accounts from different banks, which can be overwhelming.

Only take this on if you feel comfortable managing everything. If you need assistance in this area, the best budgeting apps make it easier to manage your finances, especially if you have accounts at multiple banks.

A checklist for soft switching bank accounts

If you're interested in trying it out, here are some things you should do to make the process smoother:

• Do your research first: Ensure your new bank has an excellent reputation, offers accounts that meet your financial needs, and verify that accounts with sign-up bonuses don't come with higher fees.
• Make gradual shifts: When I started, I only opened a HYSA with SoFi and set up automatic transfers from my former checking account to fund and build it up over time. This gave me time to test SoFi's banking features, customer service and more to ensure it was a good fit for me.
• Create a list of automatic payments/deposits: This made switching my checking account more manageable because it gave me time to update everything when I wanted. I did this gradually over a few months to ensure I didn't miss any automatic payments before closing my older account. It also made the process much less stressful.
• Continue to shop around: I recommend shopping your savings account at least once per year. Doing this allowed me to find a better solution, which helped me reach some savings goals faster. You can use this Bankrate tool to find options fast:

The bottom line on soft switching bank accounts

The average person keeps their checking account for 17 years. Does that inertia cost you in the long run? It could, as many online banks offer substantially higher rates of return on savings accounts compared to their brick-and-mortar counterparts. This is where soft switching comes into play, as it allows you to try new bank accounts while maintaining your primary one.

The key is to take your time, research ample options to ensure you find the right one and make the switch gradually. Doing this makes the process less stressful and ensures you don't miss payments during the switch, while giving you access to the returns and features you deserve.

Related content

• Kiplinger's Best Internet Banks
• How To Get the Best Savings Account Bonuses
• Best High-Yield Savings Accounts

Now is an important time for savers to shop around. The Federal Reserve cut rates twice, and it may cut them again when it meets in December. As such, choosing the right account can help you stay on course for achieving your savings goals even with diminishing returns.

With this in mind, two options to consider have some commonalities. I'll compare how high-yield savings accounts and no-penalty CDs are similar, highlight the difference between the two and which one works best for your savings goals.

How does a no-penalty CD work?

Normally, when you open a CD, you pledge to keep the money in the account for a specified time period. But what happens if you need your money before the term matures? You could be on the hook for months of earned interest, depending on your CD term.

If you're worried about tying up your cash, one solution is a no-penalty CD. A no-penalty CD comes with terms ranging from six months to a year. However, unlike a regular CD, with a no-penalty CD, you can withdraw money once you reach the initial vesting period — normally, one week to a month.

Most importantly, no-penalty CDs come with a fixed interest rate, and many banks offer FDIC insurance to protect your investment further. If the Fed continues cutting rates, it won't impact you. The rate you lock in now is the rate you'll receive through your term.

Use the tool below to shop and compare CD rates quickly, powered by Bankrate:

Is a no-penalty CD a smart move for you?

I generally recommend no-penalty CDs to savers who already feel confident in their emergency fund. A standard emergency fund typically covers three to six months of expenses, but aiming for closer to a year gives you more breathing room if a job loss or unexpected setback occurs.

The reason comes down to maximizing your earnings. When you open a no-penalty CD, you lock in a fixed interest rate for the full term. However, if you end up withdrawing the money soon after opening the account, the CD will close, and those funds are no longer earning that fixed rate.

If the Fed cuts rates again and you move that money back into a high-yield savings account, you may end up with a lower APY than what you originally locked in. In that case, you miss out on the long-term benefit of securing a higher rate today.

Another thing to keep in mind about no-penalty CDs is that each bank treats them differently. Some will allow you to withdraw the entire amount once you reach your vesting period, while others permit one withdrawal per month. Therefore, they work best for established savers who want to grow some of their earnings with minimal risk.

Do you want an account recommendation? Climate First Bank offers a six-month no-penalty CD earning 4.34% APY.

Are high-yield savings accounts still a wise option?

I believe they are. I've been reviewing rates weekly on all savings accounts and have been surprised to find that some of the top accounts haven't issued rate drops. To demonstrate, Newtek Bank offers a high-yield account with a 4.35% APY. This rate has remained the same for the past few months, allowing savers to capitalize on higher returns for longer than other banks.

HYSAs are excellent savings vehicles for savers with short-term goals (think three months or less). If you're looking to earn some money for a few months to fund a project or a vacation, they're a great option to consider.

Many online banks offer them with no account fees or minimums and FDIC Insurance, making this an exceptional choice for short-term saving goals or for those looking to grow their emergency fund.

You can quickly compare some of today's best savings offers using this Bankrate tool:

Of course, there's something you must consider with high-yield savings accounts: They come with variable interest rates.

It means that if the Fed cuts rates again, your APY will dip. However, given that it takes some banks months to respond to Fed policy, you can still maximize higher rates if you act quickly.

Here's a breakdown of different scenarios and which of these two accounts works best in each:

The bottom line on high-yield savings vs no-penalty CD

For savers with shorter-term goals or needing to build an emergency fund, a high-yield savings account remains a wise option, as you'll earn an APY that outpaces inflation. You can also use them for any funds that require immediate liquidity.

Meanwhile, if you're an established saver who's looking for a slightly longer-term option, a no-penalty CD works the best. It offers a fixed interest rate, allowing you to lock in a rate now before the Fed cuts diminish it further.

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Answer: My first suggestion would be to invest it in an index fund since they offer historically higher returns than savings accounts. However, if you're concerned about market volatility, there are a few other solutions that would work best for you.

Depending on your savings goals, a high-yield savings account or finding the best CD rates are smart options to consider for large deposits of $50,000 or more.

Each approach helps you earn returns that outpace inflation while eliminating risk. I'll show you these scenarios to consider, depending on your investing or savings profile.

Scenario 1: I don't mind a little risk if there's a chance of a higher reward

I recommend investing in the stock market through an index fund, in the vehicle of an exchange-traded fund (ETF) or mutual fund, if you want high returns and are OK with some risk.

The advantage is diversification. If you choose an index fund that tracks the S&P 500, for example, that fund would hold the approximately 500 biggest U.S. stocks, rather than putting all your eggs in one company's basket. Index funds also have lower or no fees since they're passively managed.

There are a few considerations before diving in. First is that your return is not guaranteed. If the index performs poorly, your returns will decline, as well. As a point of reference, the S&P 500 has historically averaged about a 10% annual return.

The bigger concerns, though, revolve around timing. That 10% return is an average, meaning some years it's higher and some years it's lower or even negative. If you find yourself needing to use this money in a bad time for the market, you'll lose out on returns.

The other timing issue is the capital gains tax, which you'll have to pay on what you earned when you sell your holding: If you hold the index fund for less than a year before selling it, you'll be subject to short-term capital gains rates, which are higher.

Altogether, this means you should think carefully about whether you're OK with tying up this inheritance money for at least a year. If you're not sure, consider one of the other scenarios.

However, if you're willing to take some risk to maximize returns and are sure you'll hold the investment for more than a year, this would be a wise option.

Scenario 2: I want to park the cash and forget about it

If you're already on course to achieve your retirement goals, and you have a healthy amount in your emergency fund (at least six months of expenses), there's no reason to go with anything but a long-term CD.

While it's likely CDs won't earn you the same return as a low-risk ETF or other investment vehicle, they're lower-risk solutions for savers wanting to keep all their money. Now is the best time to lock one in, as rates are subject to change soon.

The Federal Reserve issued its second rate cut of the year at its meeting last week. Because it takes banks some time to adjust their rates, you can still find five-year CDs with rates higher than 4%.

Use this Bankrate tool to compare and find your best option quickly:

What happens if you need the cash before the CD matures? You'll pay a significant early withdrawal fee. On a five-year CD, your penalties could be anywhere from six months to one year of earned interest, equating to hundreds of dollars lost. Only do this approach if it works for your cash flow.

Recommended account. SchoolFirst Federal Credit Union has a five-year CD with a 4.15% APY. You'll make $11,272.61 in earned interest with a $50,000 deposit if you lock it in today.

Scenario 3: I want to earn a higher rate with cash flexibility

In an uncertain economy, it makes sense to prioritize flexibility. Inflation could continue to climb in 2026, and if the Fed continues to cut rates, eventually we'll reach the point at which you're not earning enough on your savings to stay ahead.

This is why I recommend a no-penalty CD. As its name implies, you'll have the flexibility to access your cash as you need it without the harsh fees. You'll need to keep your cash in for a week to a month at the start. You'll also want to pay attention to account terms, as some banks allow you to withdraw all of it after you reach the initial vesting period, while others allow one withdrawal per month.

The benefit of this approach is that you can earn a higher rate of return that'll outpace inflation. With terms between six months to a year, you'll have quick access back to your cash as well.

Recommended account. Climate First Bank offers a six-month no-penalty CD with a 4.34% APY, where you'll earn $1,073.48 in interest.

Scenario 4: I don't want to tie any money up

If you want access to your money at all times, a CD might not be the best fit. Instead, consider a high-yield savings account.

High-yield savings accounts differ from CDs in that they come with a variable interest rate. It means if the Fed decides to cut rates again, it could impact how much you can earn from one.

That said, now is an excellent time to sign up for one. I review rates weekly, and some accounts still have APYs far above 4%. Use this Bankrate tool to find the best savings account for you:

It's a great way to protect your $50,000 without having fees eat into it. Many of the best high-yield savings accounts come with no fees or account minimums. You can always sign up for a checking account to access funds quickly with a debit card, should you go with an online bank.

Recommended account. Newtek Bank offers the best rates at 4.35%, with no minimums or monthly fees. If you store $50,000 in it for a year without any rate cuts, you'd earn $2,222.86.

Ultimately, if you plan to receive a larger sum of money and have your retirement and emergency savings fully funded, these are the best options to consider. An index fund has the chance of the highest return but some risk, and of the guaranteed-return options, CDs will earn you the most over time as you can lock in rates while they're still higher.

However, it's also tempting to go with a high-yield savings account. While you run the risk of having rates lowered in the future, it also gives you flexibility to pivot to higher-earning investments if need be — or to spend the money when you decide to. Prioritizing your savings goals upfront can direct your path.

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As you know, when the Fed cuts rates, it does make some things more affordable, such as borrowing costs on credit cards and home loans. On the other side of the coin, savers could take a hit, as APYs on savings accounts will dip slightly. That puts us in a place where the decisions you make now could have real impacts on your future yields.

But the news isn't all bad for savers. If you have $100,000 you want to put into savings for plans like a down payment on a new home, I'll show you some smart money moves to make now.

A savings approach guaranteed to generate results

If you're using the $100k to save for a specific goal in the future and don't want to put it into the stock market, a CD is going to be the best option for you. CDs have fixed interest rates. So, if you sign up for an account today and the Fed continues to cut rates, your rate doesn't change.

How much does this matter?

Say you open a five-year CD right now with $100,000, earning 4.15%. For five years, you'll receive $22,545.22 in earned interest. But if you wait until the Fed cuts rates and the banks follow suit, your APY could drop to 3.90%. At that rate, you would earn $21,081.48, $1,463.74 less than if you'd acted now.

Therefore, if you have clear intentions with your $100k and don't mind locking it up for a bit to earn more cash, now is the time to strike.

You can shop for and compare CD options quickly using this Bankrate tool:

Is long-term or short-term CD the smarter play right now?

This largely depends on what you're planning to do with the money. If you're storing a substantial sum for a specific reason, like buying a home in a few years, it makes sense to do a longer-term CD now while rates are still high.

But you need to make sure you don't need that money before the CD matures, because if you break it open before it matures, it would be expensive. Longer-term CDs come with steep fees for early withdrawal, where you could lose up to a year of interest earned, which, with the sum deposited, could equate to hundreds of dollars lost.

Another approach is to consider a short-term option. With it, you'll receive a high rate of return with quicker access to your cash. Then, if inflation continues to rise heading into next year, you'll have time to pivot to investments that could earn more.

And the best product for this approach, if you have around $100,000 to save, is a jumbo CD. Jumbo CDs work the same way as regular CDs, but the deposit requirements are much higher – usually from $10,000-$100,000.

With one, you can earn returns outpacing inflation and have access to your cash within six months to a year. Not bad for reaching short-term savings goals.

When will my savings account rates drop after a rate cut?

I've been reviewing and updating rates on CDs and high-yield savings accounts, and what I've found is that it varies depending on your financial institution. To illustrate, the best three-year CD rates used to be close to 4.28% APY; now, you're lucky to find some around 4.00%.

Meanwhile, some banks haven't changed their rates at all. I have a high-yield savings account with SoFi, and rates haven't dipped yet. The same applies to the best high-yield savings accounts.

One of our top choices, Newtek Bank, still offers gains of 4.35%. On the CD side, you can get a six-month no-penalty CD through Climate First Bank for 4.34%. But you'll want to act quickly, as rates can change overnight.

Overall, the rate environment is shifting for savers. With the Fed possibly cutting rates again before the end of 2025, now is the time to take advantage when rates are higher.

For savers with substantial deposits, making the right move now could help you save thousands more. This can help you reach your savings goals faster, without the risk of losing money.

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“As you get to the retirement red zone, you are getting close to bringing out your best plays,” says Matt Radgowski, CEO of Halo Investing. “You also have to recognize that whatever path you lay out, you have to revisit that consistently.”

When it comes to retirement, some mistakes are far bigger than others. Here's a look at the "doozies" — the errors that can force you to change your lifestyle or even return to work — and, crucially, how you can prepare now to avoid them.

1. You feel lost without your job

For many of us, our self-worth and sense of purpose are entwined with our jobs. We spend so much time at work that it's hard to separate it from the rest of our lives. It's where we find joy, social connections, accomplishments, and often pride. But when we retire, we lose that overnight.

That can lead to depression, which, if left unchecked, could be debilitating, especially if you want to return to work but find you can’t.

Thinking that work has to end the minute you retire is mistake number one, says Radgowski. Instead, he says people should approach retirement in phases. Start by reducing your hours, or move to part-time or consulting instead of retiring outright. If you can’t do that, line up volunteering work or a new part-time job before you exit the workforce so you don’t lose that sense of purpose or routine.

“You should plan for a glide path into retirement,” says Radgowski. "It doesn’t have to be a hard cutover," he says.

2. You're facing a retirement funding shortfall

Nobody wants to run out of money in retirement, yet it's a reality for many. Even with Social Security and savings, a sudden emergency or a period of high inflation can quickly create a shortfall, forcing retirees to drastically curb their lifestyle or return to the workforce.

But a retirement shortfall is a mistake that can be avoided, and Daniel Evans, a financial advisor at Bogart Wealth, says all it takes is planning. “The mistakes I see are not having a financial plan or at least not running the numbers and setting expectations,” said Evans.

Not only do you need a plan, but you have to stress test that plan, he said. “It's absolutely imperative. The longer you plan before retirement, the longer runway you have. That’s what helps that transition from working to retirement,” he says.

Evans says that in your mid to late 40s, you should get serious about your retirement plan, and in your 50s, you should fine-tune and revisit it.

3. You're bored and/or lonely

Retirement is supposed to be the time to check off all those bucket list items, to pursue those trips you never had a chance to get around to, and to spend quality time with friends, family and loved ones. But for some people, it ends up being a lot of idle time sitting in front of the TV.

The problem: they don’t have hobbies, friends or ways to spend all this newfound freedom. That boredom can be paralyzing, especially if you don’t know how to find a hobby or social connections.

It is also why Jeff Smith, founder of The Retirement Smith, says it's a big mistake not to have hobbies in place well in advance of your retirement date. “Lay the groundwork now while you’re still earning,” says Smith. “That way, you enter retirement with activities already in place.”

Evans recalls one client who retired from working as a safety engineer for an offshore drilling rig and never had any hobbies during his working life. But once he retired, he got involved in pickleball, which had a huge impact on the quality of his retirement life.

“He started to develop a network, and it also worked on his health; he lost weight and was in better shape,” said Evans. “It branched out into a volunteer position with a food bank. By avoiding a sedentary lifestyle and being active, it all snowballs into a compounding effect.”

4. Your health is suffering

Health care ain't cheap, and that’s particularly true in retirement. Even with Medicare, which kicks in at age 65 and covers about 80% of your health care expenses in retirement, Fidelity Investments estimates an individual will spend $172,500 in out-of-pocket expenses. That doesn’t take into account any illnesses, unexpected emergencies, or stints in a long-term care facility.

Despite the costs, many people don’t worry about their health in the run-up to retirement and face a shortfall when they do need long-term care.

The easiest way to avoid that is to live a healthy lifestyle. The healthier you are before you retire, the less money you’ll need to spend on your health in retirement. That’s not to say you won’t get sick — your family’s health history can give you insight into that — but you can avoid some chronic illnesses if you maintain a healthy weight, exercise regularly and eat properly.

“If you want to directly impact health costs in the future, making those healthy choices and avoiding a sedentary lifestyle is the most direct way you can lower the cost of health,” said Evans, noting it also increases longevity.

It's also worthwhile to plan for how you’ll cover any out-of-pocket health expenses in retirement ahead of time, whether it's through savings, a combination of savings and a Health Savings Account, or via long-term-care insurance.

Plan, plan and more planning

Retirement isn’t one of those things you can go into blindly or just say you’ll wing it. It requires a lot of preparation and planning, and then revisiting that plan over and over again until you retire. It shouldn’t be etched in stone, but rather a moving, flexible plan that can be altered as your goals change.

The sooner you get started planning and preparing for retirement, the better the likelihood you won’t make the mistakes of those who came before you.

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Whether you've already been receiving Social Security payments by direct deposit or if you'll be starting to receive them that way soon, it's worth taking time to consider where your payments are being deposited. This decision could earn you valuable interest — or cost you in fees and missed opportunity.

That's because some bank accounts offer generous APYs, helping you earn more money and stay ahead of inflation, while some come with high fees, which can reduce your earnings. I'll show you which options are best for optimizing your earnings.

Outpace inflation with high-yield savings accounts

One smart solution is to deposit your Social Security payments directly into a high-yield savings account. You can find high-yield savings accounts (HYSA) that'll earn you over 4.00% APY, with no account fees or minimums.

This option works best if you treat your Social Security earnings as supplemental income, since you can have it sit and earn higher interest until you need to use the funds.

What I like best about high-yield savings accounts is their flexibility. Unlike CDs, where you have to pledge your money for a specified term, you can access your high-yield savings account anytime you need.

Considerations: Many HYSAs are from online banks, not brick-and-mortar, so you would not have the option of stopping into a local location to problem-solve. If you need to use the funds, you also have to contend with transferring them to, say, a checking account, which doesn't happen instantaneously, so you have to plan.

If you're concerned about signing up with an online bank for cash access, I recommend also opening a checking account with that online bank. Look for checking accounts that offer debit cards, which allow you quick access to your cash.

And if you're interested in signing up for a HYSA, use this Bankrate tool to find the best options quickly:

Try a savings account with checking account flexibility

Another option to consider is a money market account. What makes them unique is that you'll earn an APY that rivals some of the best high-yield savings accounts, but you have more options to access your cash than you do with a HYSA.

Most money market accounts come with debit card privileges. Some also offer check-writing capabilities. This way, you don't have to contend with paying ATM fees or waiting for transfers if you need access to your money.

Considerations: Many money market accounts have monthly transaction limits. If you exceed them, the bank can decide to decline the transaction or approve it and charge you a fee.

As such, only use a money market account if you don't plan to make many purchases on the account. Another thing to consider is that these accounts have monthly fees if you don't meet the minimum balance requirement – think $1,000 or more.

Can I use a local bank?

If you don't want to give up banking with your local branch, I don't blame you. There's a personalization there that's hard to come by with online banks. Plus, it can be a great undertaking to switch your bank accounts.

By that same token, many brick-and-mortar banks don't offer the same level of returns you can receive with an online bank. For example, I checked the savings rate with my local PNC Bank. For balances $1,000-$2,499, I would earn 0.02% APY. Anything above that earns me 0.03% APY.

By comparison, Newtek Bank has a high-yield savings account that earns 4.35% APY. Choosing this option, especially if you have $10,000 in the bank or more, ensures you earn hundreds of dollars in interest annually. So, if you do decide to go with a traditional bank, look for one that offers high-yield savings accounts, or else accept that you'll lose out on some money.

Considerations: Sometimes, it makes sense to stay with your local branch. If you have an aging parent who relies on a personal banker to help them with bill payments and budgeting, then I wouldn't recommend switching.

Some local banks also offer savings account bonuses, where you can earn hundreds of dollars for opening an account, setting up direct deposits of your Social Security check and keeping that account open for at least a few months. Use this in the interim if you can, but know eventually you'll need to switch to a savings account with a higher APY to keep your earnings growing.

The bottom line on where to deposit your Social Security check

With almost all Social Security recipients receiving their checks electronically, choosing the right bank account is vital. By selecting one that offers no account fees or minimums, with higher APYs, you're allowing your money to continue to grow to outpace inflation.

This is why high-yield savings accounts continue to be the best option to consider. However, if you want more flexibility in how you access your cash, money market accounts give you more ways to do so, while also earning far more than your local branch will pay you.

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Sixty-two seems like the perfect age to retire. After all, you can start collecting Social Security. Plus, you're still young enough to enjoy it.

It's no wonder 62 is the average age of retirement in America. But retiring at that age or earlier could be one of the biggest mistakes a person can make.

At least according to retirement expert, author and podcaster Dave Ramsey.

“People underestimate how long they’ll live and how much money they’ll need,” Ramsey tells Kiplinger.com. “They retire broke or way too early. It's like jumping out of a plane without checking your parachute.”

This applies to the millions of people who choose to retire early, not the ones who are forced out of their jobs because of an illness, disability, workforce reduction, or a sick family member they have to care for.

Been There, Done That
Ramsey has seen it before. For over twenty years, the author, founder and CEO of Ramsey Solutions and host of “The Ramsey Show,” has helped millions of people get out of debt, take charge of their financial lives and achieve their retirement goals.

He speaks from experience. After running up thousands of dollars in debt and being forced to declare bankruptcy at age 26, Ramsey not only climbed out of the financial hole he created but went on to build a career teaching others how to achieve financial freedom.

The knock on retiring early

Retiring early is the dream of millions of Americans, regardless of whether that means exiting the workforce in their 50s or early 60s. While there are advantages to early retirement, there are also some clear disadvantages that make Ramsey staunchly against it.

For starters, if you retire before Medicare kicks in at 65, you will have to fund your own health care, which can get expensive. Plus, if you don’t plan to work at least part-time, you’ll have to figure out how to grow your savings and generate cash flow. With so many years without a steady income, there is a chance you could run out of money. If you retire at 62 and collect Social Security, be willing to take up to a 30% reduction in benefits for your lifetime.

All of this may be fine if you’ve saved enough for retirement and you're flush with cash. But if you rely on Social Security to supplement your monthly income, a reduction in your benefits because you retired early could impact your quality of life. Additionally, retiring early means less money saved, plus more years you have to draw from your savings.

“Don’t retire until you’re truly ready,” says Ramsey. “That means zero debt, a fully funded nest egg, and a clear monthly budget. Work longer if you need to, and budget like your future depends on it — because it does.”

Retire debt-free

Retiring with debt is another one of the biggest retirement mistakes Ramsey encounters. People think they can handle the monthly mortgage payment and/or car payment, but one unexpected illness or accident, and all of a sudden, they are in over their heads.

That’s why Ramsey says people should be entirely debt-free in retirement, including paying off their mortgage, regardless of a low interest rate. When you owe money, you can’t achieve financial freedom and security in retirement.

"They hang onto debt. Especially mortgages and car payments. Then they assume they’ll just ‘manage it’ in retirement,” says Ramsey. “The fix is simple. Attack that debt with intensity now, before you step into your golden years.”

It’s never too late to fix your retirement mistakes

Retirement isn’t the end of the road. If you make mistakes, such as retiring too early or with too little money, you have options to fix them. You can go back to work, downsize or reduce your budget.

If you haven’t retired yet, you can put in the work now to prepare for it or delay retiring to get yourself in a better position later.

"It’s never too late to start doing the right thing,” says Ramsey. “You may not have 40 years left, but you’ve got today. And that’s enough to start turning the ship around.”

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Why are they cutting rates? The jobs reports indicate a significant cooldown in hiring, with only 27,000 jobs added in the last four months. And one way to stimulate employment is with rate cuts, since it lowers borrowing costs for companies.

Meanwhile, savers must navigate a future with lower returns. Thankfully, if you have significant cash (think $10,000 or more) to store somewhere safe, there are some smart options to consider.

Use a CD to shield against future rate cuts

A certificate of deposit is one surefire way to fight back against rate cuts. CDs offer fixed interest rates, so from the minute you sign up and fund the account through its maturity date, you'll receive the same rate of return.

Now, the question becomes which CD works best for you? Long-term options, like the best five-year CD rates, offer returns outpacing inflation.

Our top choice, SchoolsFirst Federal Credit Union, has a 4.15% APY. With a $10,000 deposit, you'll earn $2,254.52. Not bad for a risk-free option.

Using this Bankrate tool, you can compare and find the best CD options fast:

But there's a catch with long-term options. If your finances change in the future and you need access to that cash, the penalties for breaking open the CD can be steep. How steep? You could lose between six months to a year of interest earned. That's potentially hundreds to thousands of dollars.

Therefore, you want to make sure you can part with cash for that long. And if you don't, short-term options could be a better solution.

Grow your savings with flexibility

Thankfully, CDs come in shorter terms too. For savers with larger deposits (think way more than $10,000), I would recommend a jumbo CD. A jumbo CD works like a regular one, only you have to deposit at least $25,000 to $100,000.

What I like about them is that you can earn a lot of money in a short time. To demonstrate, EFCU Financial has a jumbo CD that earns 4.35% APY for one year with a minimum deposit of $100,000.

In that one year, you could earn $4,350 in interest with a $100,000 deposit. Just as important, you have access to your cash in a year. That means if inflation continues to rise, you have the opportunity to switch to other investments that might offer a better return than a CD.

Along with CDs, a high-yield savings account could also be a smart move. The best high-yield savings accounts come with returns outpacing inflation for now, no account fees and quick access to your cash whenever you need it.

You can find the right account for you by using this Bankrate tool:

However, I would caution keeping your money in one long-term. These accounts feature variable interest rates, meaning when the Fed cuts rates, your returns are lower. And with one to two possible rate cuts happening before the end of 2025, the APYs on HYSAs could nose-dive, creating a situation where you're barely keeping ahead of inflation.

Ultimately, the changing landscape of upcoming rate cuts and inflation will impact savers. If you have an emergency fund established and have significant savings you want to offload, then choosing a secure option now helps maximize earnings while rates are still high.

And the best way to do this is with a CD. CDs offer some protection from rate cuts, allowing you to strike while the iron is hot. Just remember to choose a term that works best for your cash flow, so you avoid costly early termination fees.

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They are so underutilized that Fidelity Investments found that one in two Americans is unfamiliar with the HSA and its triple tax benefits. There’s even a National HSA Awareness Day, which falls on October 15 each year, to spread the word about the benefits of this tax-advantaged savings tool.

“It’s drastically underutilized," says Jessica Nino, a financial advisor at Edward Jones. "Anyone currently not on Medicare on a high deductible qualifying plan can have one.”

What is an HSA?

With an HSA, you contribute tax-free dollars up to a limit to be used for qualifying health care expenses. The money in your HSA grows tax-free, and withdrawals for those health care expenses are tax-free. There is no use-it–or-lose-it rule attached to an HSA.

For 2025, the contribution limit is $4,300 for self-only coverage and $8,550 for family coverage. If you are 55 or older, you can contribute an additional $1,000. An HSA is only available with a high deductible health plan, which means a deductible of $1,650 for a single person and $3,300 for a family. Once you turn 65 and go on Medicare, you can no longer contribute to an HSA.

In 2026, contributions increase to $4,400 for self-only coverage and $8,750 for family coverage. The 55+ catch-up is unchanged. The deductible increases to $1,700 for a single person and $3,400 for a family.

How to get an HSA

If your employer offers an HSA, you can typically sign up during open enrollment and have contributions deducted from your paycheck automatically. The money will come out of your paycheck on a pre-tax basis. Some employers will even match your contributions to a certain limit.

If your employer doesn’t offer an HSA, you can still open one directly through many banks, credit unions, and investment firms. In this case, you would contribute funds straight from your bank account. However, it's important to do your own research and/or discuss it with a trusted financial adviser before opening an account.

If you have private health insurance, you can either select a financial institution on your own or one of the HSA providers that the health insurer teams up with. The process is the same otherwise.

Boost your HSA with these moves

Now that you know the benefits of an HSA, Nino says there are some moves you can make to get the most out of having one. After all, the money you’re saving in your HSA isn’t just sitting there. It is being invested and growing and compounding and hopefully becoming a nice nest egg.

1. Let the money grow over time. Assuming you are contributing the maximum and taking advantage of catch-up contributions, Nino says one HSA balance boosting move is an easy one: don’t use it.

“If you can pay for your current health care costs, that will then allow you to have options,” she says. "You can invest the HSA dollars and grow them tax deferred, like a Roth IRA, and then in retirement pull money out for medical expenses tax-free.”

While an HSA is not likely to cover all your health care needs in retirement — Fidelity estimates an average of $174,500 in out-of-pocket costs — it can help.

2. Pay yourself back for past medical expenses. Another strategy, aimed at pulling money out of the HSA tax-free, is to use past medical expenses to justify current withdrawals in retirement. For instance, if you pay all your qualified medical expenses out-of-pocket from your mid-50s until age 65 (when Medicare kicks in) and save every receipt, you can then withdraw all of that money tax-free from your HSA — as long as you have the corresponding documentation.

“There’s no time limit for you to pull out the dollars,” says Nino. Remember, if you use the money for non-qualifying health care expenses, you’ll pay taxes on the withdrawals.

If you got it, take advantage of it

HSAs are a tax-advantaged way to save for health care expenses now and into the future. Whether you can contribute the maximum amount allowed by law, or only a small amount, HSAs can help you cover the burden if you get sick.

The above tips can help you take advantage of something that already gives you a triple tax benefit–you can’t say that of many other savings products available to everyday investors.

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• 10 Things You Need to Know About Health Savings Accounts
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• The 'Me-First' Rule of Retirement Spending

The Federal Reserve didn't like the job numbers, prompting it to cut rates for the first time this year at its September meeting. They are expected to meet again later this month, with the markets anticipating another quarter-point rate cut.

As you know, when the Fed cuts rates, the APYs on all savings accounts decrease. However, even with rate cuts, there are smart options to grow your money and stay ahead of inflation.

I'll show you a simple two-step savings strategy that can help you reach your savings goals. And if you time it just right, you won't lose money.

Build an emergency base with high-yield savings

Even with lower APYs, high-yield savings accounts still help you earn a return that outpaces inflation. This is important because you might not be in a position where you're comfortable tying up money for years in a CD.

And that's one of the perks of a HYSA. They offer you access when you need it without having to pay early withdrawal fees. However, one critical aspect to note moving forward is that these accounts have variable interest rates.

The Fed is likely to cut rates at its next meeting, which could cause these yields to slip a bit and reduce your earning power. That said, they still make a great account if you're looking to build an emergency fund or just want quick access to your cash.

Explore and compare some of today's best rates quickly using the Bankrate tool below:

Before opening an account, here's a checklist on how to approach this:

• Search for no-fee options, as they typically don't require minimum balances or deposits.
• Switch your checking account to the online bank you use for HYSA. I use Sofi's checking and savings accounts, which allow me quick access to my cash if I need it.
• Refrain from using local banks unless they have savings incentives, such as bonuses for opening an account. Most won't offer returns anywhere near what you can receive with an online bank, and some of these accounts come laden with fees.
• Once you have a comfortable emergency savings built up, be ready to switch strategies.

CDs remain the best risk-free option for established savers

Meanwhile, if you have built a healthy emergency fund and want a risk-free place to park your funds, consider a certificate of deposit.

Why? Because it features fixed rates. Say you sign up for a one-year CD today. Even if the Fed cuts rates two more times, it's not going to impact you. This is integral if you're looking to maximize your earnings.

Explore some of today's best CD rates using this Bankrate tool:

Similar to HYSAs, there are a few things to consider with CDs:

• If you haven't used one before, start with one with a shorter maturity term. CD terms can be as short as a month, helping you determine if your cash flow can handle it.
• Banks base prepayment penalties on your CD length. It means a five-year CD could have early withdrawal penalties of six months to a year of interest earned. Only sign up for one of these if you feel comfortable not having cash until the maturity date.
• Many banks auto-renew CDs. Therefore, set a reminder a week or two before the maturity date, so you have time to determine where you want to put the money next.
• CDs work best only after you've reached or are on course to reach your investing and emergency savings goals.

How much do rate cuts impact earnings?

I've been watching savings and CDs since the Fed's September announcement, and for the ones that have changed, the dip has been between 0.10%-0.30% APY.

If you're a short-term saver, it's not going to impact your earnings as much as, say, someone wanting a five-year CD.

On this end, the longer you plan to use a CD, the more at risk you are to lose money if you don't lock it in before the next rate cut.

For example, a $50,000 deposit in a five-year CD at 4.00% APY earns you $10,832.65. However, if you wait for a few rate cuts to happen at the October and December Fed meetings, that APY could dip as low as 3.50%.

At this rate, for five years, you'd earn $9,384.32, a loss of $1,488.33. Therefore, timing matters substantially when you choose to lock in a CD.

Overall, now is the time for established savers to capitalize on higher CD rates. Doing so ensures you maximize your returns with higher rates before the next Fed meeting later this month.

Conversely, if you need to build your savings, a high-yield savings account is still the smart play. You'll earn rates above 4%, and even with future rate cuts, your earnings keep you ahead of inflation.

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Vanguard research shows that setting aside $2,000 can boost your financial stability by 21%. If you add three to six months' worth of expenses, you get another 13% bump, even after factoring in income, debt and other assets.

An emergency fund is the money you set aside to cover unexpected expenses during unforeseen circumstances, such as a job loss, medical situations and house repairs. But if you're oversaving for this fund, that can be a problem, unlikely as it might seem.

How come? We'll discuss the hidden risks of maintaining an overly large emergency fund, because saving too much could hurt instead of help.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

The problem with saving too much

Vanguard's report speaks volumes. It's wise to save to establish financial stability.

However, oversaving for your emergency fund can be problematic. You're missing out on other monetary opportunities that could potentially grow your wealth and provide a higher quality of life.

Signs you're saving too much:

• You've got more than a year's worth of expenses sitting in savings
• Your investment accounts and retirement funds aren't where they should be
• You focus on stashing cash instead of knocking out high-interest debt
• You feel uneasy about moving money into investments that could grow faster

Among the hidden financial risks of oversaving for your emergency fund:

1. Lost financial growth

When all your extra money sits in a basic savings account, it likely earns little interest.

Better options include a high-yield savings accounts with interest rates of up to 4.35% or in stocks, bonds, mutual funds and real estate investment trusts (REITs).

Andrew Bates, COO at Bates Electric, recommends establishing high-yield savings and investment accounts after building an emergency fund. He believes it's one way to avoid losing the financial growth you deserve.

"Parking too much cash in your emergency fund means you're missing out on real growth," Bates says. "A smarter move is to use high-yield savings for liquidity and put the rest into investments like stocks or REITs, where your money can actually work for you."

2. Potential inflation risk

As prices go up every year, savings slowly lose value, especially if you live in cities hit hard by inflation. As of August 2025, the inflation rate in the U.S. is 2.9%.

If your savings account for your emergency fund earns only 2%, your money is actually shrinking in terms of purchasing power. The more cash you stockpile, the bigger this hidden loss becomes.

Leon Huang, CEO at RapidDirect, suggests beating inflation through investment diversification instead of putting extra money in an emergency fund.

"Keeping too much in low-interest savings is like letting inflation chip away at your money," Huang explains. "Diversifying into assets like stocks and bonds helps preserve and even grow your purchasing power over time.

"Remember, don't let your savings sit idle when they could be working harder for you."

3. Financial opportunity cost

Every extra dollar in your emergency fund is money not working elsewhere. It's just sitting in a low-yield savings account when that money could be growing or improving your finances.

Use it to pay off high-interest debt, prepare for retirement or buy your dream home or start a business, for example.

The message is clear: Oversaving for your emergency fund means missing out on several opportunities.

Learn from Edward White, head of Growth at beehiiv. When he earns extra money from his income or business, he considers balancing various aspects of his finances.

"Cash that just sits in a savings account isn't doing you any favors," White says. "Redirecting that money toward paying off debt, building retirement funds or investing in your next big project creates real financial progress. At the end of the day, money should be a tool for growth, not just a safety net."

4. Psychological mindset trap

There's a line between being financially secure and overly cautious. Having a substantial amount of money can feel reassuring.

However, you could end up being financially trapped. For example, you avoid paying off loans and making investments because you're clinging to that "safety net." Over time, this mindset can hinder your financial progress.

Take it from Raihan Masroor, founder and CEO at Your Doctors Online. He once feared making investments and expanding his business by going digital. However, he quickly learned that this mindset means not making financial progress.

Masroor warns against the psychological trap of oversaving. "Clinging too tightly to cash can make you overly cautious and stall your growth.

"I've learned that avoiding investments or expansion out of fear doesn't protect you, but keeps you stuck. True financial security comes from balance, not from hoarding money."

Finding the sweet spot

The reason you're saving for an emergency fund is to prepare for unexpected situations or manage your fluctuating income. But if you've saved enough to be financially prepared for the rainy seasons, you can use extra cash for other financial opportunities.

Start by saving just enough for your emergency fund. There's no set amount for an emergency fund. The target largely depends on your income and expenses, as well as dependents and overall lifestyle.

According to most financial experts, the general rule is simple: Build three to six months' worth of living expenses.

This means that if you suddenly lose your job, for example, you can cover expenses such as bills and groceries for three to six months, or until you find new employment.

What to do with extra money

Once you hit your emergency funds target, use your extra money for other financial opportunities:

Debt payments (credit cards, personal loans, mortgage, etc.). It's more practical to use your money to settle debts, whether you're paying off credit cards or personal loans. It doesn't make sense to oversave for your emergency fund if you haven't zeroed out your debts.

Specific savings (education, real estate, travel, etc.). Put extra cash into a high-yield savings account, which will exponentially grow your money. You can also use this money to invest in your dream house, finance your children's future education or even find deals on your travel in 2025.

Looking for expert tips to grow and preserve your wealth? Sign up for Adviser Intel (formerly known as Building Wealth), our free, twice-weekly newsletter.

Basic insurance (health insurance, life insurance, etc.). To protect yourself from financial risks, it's wise to invest in different types of insurance.

Consider getting medical coverage, whole life insurance, a dental policy and/or pharmaceutical benefits. Think of these as secondary emergency funds.

Investment diversification (stocks, bonds, mutual funds, REITs, etc.). It's a good idea to get strategic about your investments by diversifying your portfolio. Not only will this help grow your money, but it also reduces your financial risks.

Wrapping up

Building an emergency fund is one of the first steps to establishing your financial security. But if you oversave for this fund, you might lose investment growth and face inflation risks. You might be psychologically trapped, missing out on many financial opportunities.

Build three to six months' worth of living expenses, then, allocate extra money towards loans, savings, insurance and investments.

When it comes to money, it's a numbers game — be wise about saving and investing.

Related Content

• Saving for Your Emergency Fund: As Easy as 1-3-6
• The Seven-Day Financial Reset: A Simple Plan to Get Control of Your Money, From an Expert
• I'm a Financial Adviser: This Is How You Can Save for Big Goals Even if You Feel Like You're Barely Getting By
• Extra Cash? Should You Pay Off Debt or Invest?

This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Available exclusively for the benefit of children under age 18, this account was originally supposed to be a super-tax-advantaged way for young people to save for college, a first home or to start a business.

The final watered-down product, however, more closely resembles a traditional IRA — only without the benefits of tax-deductible contributions.

Kiplinger's Adviser Intel, formerly known as Building Wealth, is a curated network of trusted financial professionals who share expert insights on wealth building and preservation. Contributors, including fiduciary financial planners, wealth managers, CEOs and attorneys, provide actionable advice about retirement planning, estate planning, tax strategies and more. Experts are invited to contribute and do not pay to be included, so you can trust their advice is honest and valuable.

As these accounts become available starting in 2026, many clients with young children (and expectant parents) will be asking advisers questions about them:

• How are they funded?
• What do they invest in?
• Are withdrawals taxed?
• How do they stack up to other savings options?

In most cases, other vehicles offer superior tax benefits, higher contribution limits and greater portfolio customization.

Advisers shouldn't be afraid to make these comparisons. But they need to be very careful if the alternatives they recommend to a Trump Account would earn them fees or other compensation. Doing so in a haphazard way could put them in the SEC's fiduciary crosshairs.

Trump accounts: Basic facts

For children born in 2025, 2026, 2027 and 2028, the U.S. government will open a Trump Account for them with a $1,000 contribution.

Starting in 2026, any parent will also be able to establish an account for a child who is under age 18 anytime before the end of 2028.

Once established, parents and other individuals will be able to make after-tax contributions of up to an aggregated total of $5,000 per year.

On top of this limit, employers and qualified charitable institutions will be able to contribute $2,500 to a child's account. These contributions will not count as taxable income.

It's not clear at this point whether this is a lifetime or annual contribution limit.

All contributions will be invested in a single low-cost, broad stock market index fund or ETF.

Earnings will grow tax-deferred until the child can start withdrawing them in the year they turn 18.

Then what?

At this point, it appears that a Trump Account essentially becomes, for all intents and purposes, a traditional IRA.

Like traditional IRAs, withdrawals from Trump Accounts will be taxed as ordinary income. And, like IRAs, the child may be hit with a 10% early withdrawal penalty unless withdrawals are used to pay for qualified expenses, such as:

• Higher education costs
• The purchase of a first home
• Expenses related to recovery from a federally declared disaster

Like an IRA, early withdrawal penalties will be waived once the account owner turns 59½. And, at the moment, it appears that annual required minimum distributions (RMDs) will be required if the account still has assets when the child turns 75.

Since contributions are made after-tax, it's not clear whether account owners will be able to withdraw contributed principal (not earnings) without tax consequences, especially if these contributions were made by someone other than the owner themselves.

What is it good for?

On the surface, the Trump Account looks like an easy way for parents to put away money for their children at an early age to give them a head start on saving for college or retirement.

But when you start comparing the Trump Account to other savings vehicles, its limitations stand out.

There are better college savings options

529 college savings plans allow parents, grandparents and others to make after-tax contributions up to a total aggregated lifetime contribution limit per account that varies by state (on average, it's about $402,000). In 30 states, a portion of 529 plan contributions is state-tax-deductible.

Contributions can be diversified across a mix of stock and bond funds, and all withdrawals are tax-free if they're used to pay for qualified educational expenses.

And these expenses aren't limited to college tuition.

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The OBBB now allows tax-free 529 plan withdrawals to pay for K-12 private school tuition, homeschooling expenses, tutoring costs, standardized test fees, educational therapies and post-secondary credentialing programs.

And if there's money left over in a 529 Plan, up to $35,000 in total can be rolled over into a tax-free Roth IRA established by the beneficiary.

Minor Roth IRAs are better retirement savings vehicles

Speaking of Roth IRAs, when a child starts earning their own income, their parents can establish a minor Roth IRA, also known as a custodial Roth IRA, that will allow them to contribute up to the amount the child earns or $7,000, whichever is lower.

The child takes ownership of the account when they turn 18, and any distributions they take after age 59½ will be totally tax-free. And, unlike traditional IRAs or Trump Accounts, RMDs are not mandatory for Roth IRA owners.

Even UGMAs/UTMAs may offer better tax benefits

Uniform Gifts/Transfers to Minors Accounts allow parents to contribute as much as they want to after taxes to establish these custodial trust accounts for their children.

Depending on the custodian, assets can be diversified across stocks, bonds, mutual funds and ETFs.

And while a portion of ordinary income and realized capital gains generated by earnings are taxable, investors (or advisers) can use tax-loss harvesting and strategic cost-basis step-up strategies to reduce investment taxes.

The risks of recommending Trump Account alternatives

Other than serving as a tax-deferred savings vehicle that can be funded as soon as a child is born, Trump Accounts offer few advantages over other kinds of savings accounts.

Investment advisers who agree with this opinion should feel free to express it to clients who ask about Trump Accounts, or express their opinions in public.

But if they recommend any of the alternatives mentioned above, they need to be very careful that their advice doesn't raise fiduciary red flags.

This is most likely to happen if, after hearing these recommendations, a client offers to pay the adviser to manage the investments in one or more of these Trump Account alternatives. Or if the adviser recommends their own managed solution.

In either scenario, the adviser's actions could be perceived as conflicted, since they might materially benefit from this advice.

And since an adviser's fee for managing these alternative accounts will probably be significantly higher than those charged by a Trump Account (whose annual fees cannot exceed 0.1% of the account balance), they may face a fiduciary quagmire in trying to explain how their recommendations are truly in their clients' best interests.

It's unclear whether the SEC will eventually provide guidance to help investment advisers navigate this fiduciary minefield.

So, until there's clarity, advisers may want to ask their firm's compliance officer to proactively develop their firm's rules of the road for guiding and documenting these kinds of comparative discussions.

Related Content

• The GOP Wants to Auto-Enroll Your Child in a Trump Account for Savings
• Three Major 2025 Tax Changes for Parents in 'Big Beautiful Bill'
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• How Google Reviews Can Help (or Hurt) Financial Advisers
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This article was written by and presents the views of our contributing adviser, not the Kiplinger editorial staff. You can check adviser records with the SEC or with FINRA.

Answer: If you're looking for a risk-free place to store your money, my best solution is a jumbo CD. Jumbo CDs come with FDIC insurance up to $250,000 and APYs that'll outpace inflation.

However, there are a few things you want to consider before signing up for one. I'll cover key considerations, how much you can earn and why now is the right time to get one.

How does a jumbo CD work?

A jumbo CD is a type of savings account that requires a large deposit, typically between $10,000 - $100,000. Similar to regular CDs, you'll open an account with an initial deposit and let it grow through its term.

If you need to withdraw it before the maturity date, you'll have to break your term. Doing so results in significant penalties, reducing the interest you'll earn on your investment. The longer your CD term is, the higher the penalties you'll incur.

What's beneficial about jumbo CDs is that they require shorter terms of six months to a year, so you'll have quick access back to your cash. Explore and compare options quickly using the tool below, powered by Bankrate:

Things to consider before signing up for one now

Along with making sure you can keep your money tied up in one place, you'll also want to shop around to ensure you're receiving the best rate of return.

Traditional banks usually cannot compete with online banks. Online banks don't have brick-and-mortar locations, meaning they don't have the overhead expenses, so they can offer more generous returns. While accessing your cash at the end of the term can be trickier, online banks allow you to transfer money to other accounts.

Keep in mind that many banks autorenew CDs. Set a reminder on your phone a week before the maturity date so you can explore other options, reinvest in the same CD, or cash out if rates are much lower.

Why should I sign up for one now?

The Federal Reserve issued its first rate cut of 2025 at its September meeting. When the Fed cuts rates, it lowers the returns savers can earn on all savings accounts, including jumbo CDs.

How much does a cut impact rates? Before the Fed meeting, My eBanc had a one-year jumbo CD with a 4.45% APY. After the cut, the rate is down to 4.15% APY. That 0.30 percentage-point dip may not sound like much, but on a $150,000 deposit, it’s the difference between earning $6,675 and $6,225 over 12 months — a $450 gap.

While many savings products fall when the Fed lowers rates, CDs stand out because their interest rates are fixed. That means locking in a jumbo CD now protects your return when the Fed cuts rates again, which they're projected to do this week at its October meeting.

Therefore, locking in a rate now ensures you're maximizing your savings potential, without any of the risks that the stock market offers. While you might not be able to earn as much as you would with investments, jumbo CDs can deliver substantial returns.

How much can I make with a jumbo CD?

One of our top choices is Finworth. Finworth offers a six-month jumbo CD with a generous APY of 4.10%. Parking your $150,000 there for six months earns you $3,557.44 in earned interest. Not bad for a short investment.

A longer-term option is Prime Alliance Bank. It offers a one-year jumbo CD with a 4.15% APY. Depositing $150,000 into it earns you $6,225 in one year.

On the fence about which terms sound the best for you? My solution is to find what works best for your financial goals.

If you don’t need access to your money for a while, consider locking it into the longest jumbo CD available. Doing so guarantees you earn the highest rates of return to maximize yields.

Meanwhile, if you're unsure about tying up your money that long, opt for a short-term option. I often use short-term CDs as a way to stay on track with savings goals, and they consistently help me achieve them.

Ultimately, while savings APYs took a slight dip from the Fed cutting rates, you can still earn an exceptional return with a jumbo CD. With rates around 4% for both short-term and longer-term options, you'll earn thousands of dollars effortlessly with a $150,000 deposit.

The key is to lock them in now before the Fed cuts rates again this week. If you do, you'll stay ahead of inflation while having access to your cash quickly, which you can reinvest in another CD or consider other options that work best for your financial goals.

Related content

• I’ve Got $50,000 Burning A Hole in My Pocket. Where Do I Park It Amid Rate Cuts So I Don’t Lose Ground?
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Ahead of the September Fed meeting, mortgage rates dropped to their lowest level since October 2024. The average 30-year fixed rate slipped below 6.5% for the first time in months, thanks to cooling inflation and growing confidence that the Fed may begin cutting rates in the coming quarter.

The reaction was immediate: refinance applications spiked nearly 60% last week — the sharpest increase in more than two years. As rates shift, understanding who stands to benefit and who may lose ground is the first step in adjusting your financial strategy.

The big winners: Homeowners and buyers

Falling mortgage rates are a welcome break for homeowners who took out mortgages during the peak-rate periods of 2022 and 2023. For those with rates above 7%, today’s environment opens the door to consider refinancing into lower monthly payments.

That relief can free up hundreds of dollars per month, offering a much-needed buffer against other rising costs like groceries, insurance and energy.

Homebuyers also stand to benefit, at least in theory. Lower rates slightly boost affordability by reducing monthly payment burdens, making it easier to qualify for a mortgage. However, inventory remains tight in many markets, and prices are still elevated. This means buyers may find some relief but not a complete reset of the housing affordability crunch.

Curious about today's rates? Explore and compare some of today's best offers with the tool below, powered by Bankrate:

The losers: Banks, investors and savers

Not everyone wins when rates fall. Banks and investors holding older mortgage-backed securities (MBS) face losses as new loans enter the market at lower yields. As older, higher-interest loans get refinanced, the value of those securities drops, reducing bank profitability and potentially affecting investor portfolios with heavy exposure to mortgage debt.

Savers, too, may feel the downside. If the Fed signals a pivot to rate cuts in response to softening inflation and economic data, banks will likely lower yields on CDs and high-yield savings accounts.

For consumers relying on those accounts for a reasonable return, the recent gains in interest income may start to decrease. The era of 5% savings rates could be short-lived if broader rate cuts materialize.

Browse some of today's best savings account offers with the tool below, powered by Bankrate:

What it means for your financial strategy

When interest rates shift up or down, it sends a ripple effect across nearly every aspect of your personal finances. That’s especially true when mortgage rates move sharply. If you're a homeowner, a buyer, or someone with money in savings, now’s the time to pause and ask: What should I do differently?

Here are a few options to consider.

Refinance math: When it makes sense.

If you have a mortgage with an interest rate at least one percentage point higher than current offerings, now is the time to run the numbers. Just make sure you factor in closing costs, loan term changes and how long you plan to stay in the home. Refinancing isn’t always a slam dunk, but for many, it could mean real monthly savings.

Diversifying savings if yields fall.

If CD and high-yield account rates start to decline, look into laddering strategies or short-term Treasury bills to lock in higher yields while they last. Consider moving a portion of savings into I-bonds or other inflation-protected assets if you’re worried about losing ground.

Big picture: why every rate move creates both opportunity and trade-offs.

Whether you’re a homeowner, a saver or an investor, every rate change reshapes your financial landscape. With another decision coming in October, now is the time to revisit your strategy, weigh the trade-offs between borrowing and saving and make adjustments that support your long-term goals.

Falling mortgage rates can provide relief for homeowners and buyers but they also bring challenges for savers and financial institutions. Instead of seeing these shifts as purely good or bad, treat them as a signal to reassess and realign your money decisions.

Related Content:

• My Mortgage Rate is 6.5%. Should I Refinance If Rates Fall By Half a Point 
• Find the Best 30-Year Mortgage Rates Today
• How Much Does It Cost to Refinance a Mortgage and Other Questions to Consider

If you're sitting on $40,000 and want a risk-free way to grow your money, CDs and high-yield savings accounts are smart options to consider. Both offer you guaranteed returns thanks to FDIC protection up to $250,000.

With these things in mind, here's how much you can earn by saving $40,000 with each account. I also cover the three things you should consider before setting up an account, and which option works best for different risk profiles.

How much can you earn with a $40,000 deposit?

Let's start with why so many savers turn to these two options: They generate a healthy return effortlessly. If you were to open a high-yield savings account with one of our top choices, Newtek Bank, you would earn a 4.35% APY.

Now, that's sure to drop in the near future if the Fed starts cutting rates. However, even with a slight dip, you'll still outpace inflation. And if you store $40,000 in this account, here's how much you can earn in interest with the 4.35% APY:

• 1 year: $1,750
• 2 years: $3,559.69
• 3 years: $5,450.36
• 4 years: $7,427.25
• 5 years: $9,490.55

Therefore, you can earn almost $9,500 effortlessly by parking your money in a high-yield savings account for five years. If Newtek Bank isn't the right choice for you, you can use this Bankrate tool to find savings options that align with your needs:

Now, let's turn our attention to CDs. The best CD rates are usually short-term, think six months to a year. You can also earn a robust return on long-term CDs. Lafayette Federal Credit Union offers a five-year CD with a 4.28% APY.

If you put $40,000 in a five-year CD with Lafayette, you could earn $9,324.77 in interest for doing nothing. It isn't as much as you would earn with a high-yield savings account on the surface, but CDs also have another perk we'll discuss in a minute.

If you don't want to lock in a long-term CD, you can shop for the best options using this Bankrate tool.

Before signing up for either account, here are three things smart savers should know.

1. APYs will change

With the Federal Reserve potentially cutting interest rates, it lowers the returns you'll earn on a CD or high-yield savings account. The difference is that with a CD, you can lock in your rate now and maintain it through the term. CDs feature fixed interest rates, so if the Fed cuts rates again in the future, locking one in now maximizes your returns.

Meanwhile, high-yield savings accounts feature variable interest rates. It means if the Fed follows with another rate cut, it will lower how much you can earn.

APYs are not the only thing to consider when choosing between these accounts. Another option concerns how comfortable you are with not having access to your cash.

2. Do you need liquidity?

Typically, my savings strategy involves keeping my emergency fund in a high-yield savings account. That way, if an emergency arises, I can transfer funds and have quick access to my money.

CDs don't share that same luxury. The term you lock in the bank expects you to fulfill. I use CDs for short-term savings goals because they can keep you on track since you can't withdraw your money without a penalty.

If you haven't used CDs before, here's what I recommend: Start by tucking some money away in a short-term one, think three to six months. Doing so allows you to maximize returns while rates are still high and you'll have quick access back to your cash.

Another option is to consider a no-penalty CD. As its name implies, you can withdraw money once you reach the vesting period. Depending on the bank, it is usually one week to one month after you open it.

3. How long are your savings goals?

Another key consideration is how long you want to store your money in one of these accounts. With high-yield savings accounts, you're free to make changes anytime you need to, whether it's one month or 10 years into the future.

That's a nice perk to have, as you can pivot to other strategies fast. The same doesn't apply to CDs.

Unless you choose a no-penalty CD, you're locked into your term. The good news is you don't have to worry about your rates changing, but you're also sacrificing access to that money until your term expires.

Say you lock in a five-year CD, but in year three want to move more of your money to an investment account. With a CD, you can do so, but breaking it open requires months of interest earned in penalty fees, losing you money in the process.

Therefore, pay close attention to your savings goals and ensure the account you choose meets them.

What's the best savings strategy for me?

It depends on your needs and savings goals. This table breaks down how each account differs:

High-yield savings accounts are for short-term savers who want to build an emergency fund or need quick access to their cash. CDs work best for established savers looking to park a chunk of their money and forget about it until the term expires.

In either case, both of these accounts can help you reach your savings goals. The key is paying attention to your savings needs and choosing the right account to match them. Doing so helps you outpace inflation while earning a robust return.

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The CME FedWatch is 92% certain that a rate cut of 25 basis points will happen this month. When the Fed does cut rates, it will impact savers. If you have money in a high-yield savings account, you'll likely see a slight reduction in APY, as this can occur days to months after the Fed's announcement, depending on your financial institution.

However, savings rates have far exceeded 4% for a long time now. And even with a slight reduction, they'll have you outpacing inflation in the meantime. With this in mind, here's where I'm parking my money.

Set a base with an emergency fund

I'll be honest, I like to have flexibility in accessing my cash. It's why I use high-yield savings accounts to build emergency savings. What I like about them is that they're very easy to set up, they come with FDIC insurance up to $250,000 and you'll earn a healthy rate of return for risk-free options.

Circling back to the cash access, a high-yield savings account also allows me to pivot when I want to invest in something else. If inflation continues to creep up (grocery and energy prices are obscene right now), it gives me a chance to capitalize on riskier ventures that also offer a potentially better return.

With this in mind, if you're a saver who doesn't mind tucking money away, but you also want access to it quickly, use this Bankrate tool to find the best options fast:

My tip: Once you’ve built your emergency fund, consider separating it from other savings so you’re not tempted to dip into it. This way, your safety net stays intact, but your surplus dollars continue earning more while staying relatively liquid.

Lock-in a higher rate now

A certificate of deposit is a smart approach for established savers who don't mind tucking their money away and forgetting about it for months to years. I've used CDs in the past for short-term savings goals, and they do a great job of keeping you on course to meeting them.

The reason? They come with penalties if you withdraw before the term expires. And I don't like losing money.

Right now, my family has a few short-term savings goals, such as home renovations we want to do before putting it on the market. For this reason, I'll take a portion of my savings and devote it to a CD.

Compare some of today's best CD rates with the tool below, powered by Bankrate:

My tip: As I mentioned before, I like having access to my cash. So, there's a cheat code with CDs you can do to achieve both the benefit of locking in a higher rate now, with cash access should you need it moving forward.

A no-penalty CD is the Goldilocks of savings options. You can sign up for one now to lock in a great rate before the Fed lowers them. And after an initial funding term of one week to a month, you can withdraw your money either all at once or make occasional withdrawals once per month without any fees.

Here's where I wouldn't park my money right now

There are other savings options I won't touch for several reasons. One of which is a savings account from a traditional brick-and-mortar bank. Don't get me wrong, it felt like Cheers every time I went into my local branch. However, they don't offer rates anywhere close to what you receive with online banks.

I would also caution against using money market accounts. They work best for established savers who feel comfortable maintaining average daily balances above $1,000. If you're trying to build your savings or don't feel confident you can hit that target regularly, you'll likely pay monthly fees, which can offset any interest earned.

The other thing about MMAs is that they come with transaction restrictions. If you plan to write checks on the account or use debit cards, know that many banks will limit it to six transactions per month. Any transactions exceeding this limit could cost you, again negating some of the interest earned.

Ultimately, the market will soon change for savers. And even with the reduced rates, a high-yield savings account will help you earn more than inflation takes, with quick access to your money.

Further, if you have some short-term savings goals and can part with some cash, consider a CD right now. Locking them in before September 17 ensures you receive the highest rate.

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“Your 50s can be a pivotal decade for retirement readiness,” says Sabino Vargas, CFP, senior financial advisor at Vanguard. “You may need to recalibrate your retirement expectations, but with 10 to 15 years ahead, there’s still time to make meaningful progress.”

People in their 50s are in an enviable position at this stage of the run-up to retirement. For starters, many are near their peak earnings period. They are making money and, as a result, should be saving more. They are also starting to see expenses decrease as their kids grow up and are no longer on the family payroll.

Time is on their side as well. Fifteen to seventeen years before retirement is a lot of time to save and benefit from compounding.

People in their 50s also have numerous options for boosting retirement savings, including the following six.

1. Resist the lifestyle creep

Lifestyle creep has been around for ages and occurs when your spending habits rise along with your income. It can hurt your ability to save and lead to costly debt.

“A lot of people fall victim to lifestyle creep. Now that they have more cash flow, they spend more,” says Tyler End, CFP and CEO/Co-Founder of Retirable.

To avoid lifestyle creep, create a budget and stick to it. Any excess money goes to your savings. Making it automatic can be a way to ensure you aren’t overspending.

2. Take advantage of catch-up contributions

The power of compounding can not be overstated. It's what fortunes are made of and occurs when the interest in your retirement savings account earns interest. Let’s say you have a $1,000 investment earning 7% return each year. After a decade, that investment will have almost doubled to $1,967.15 thanks to compounding. Without compounding, the return would be $700. The larger the balance and the longer it's invested, the greater the compounding effect.

An easy way to increase the amount of money that benefits from compounding is to take advantage of 401(k) and IRA catch-up contributions. For people 50 and older, catch-up contributions let you contribute more to your retirement savings accounts.

For 2025, you can contribute an extra $7,500 to a 401(k) or 403(b) and an additional $1,000 to a traditional or Roth IRA. If you are between the ages of 60 and 63, there are also super catch-ups, which let you contribute an additional $11,250 to your 401(k).

“I’d say maxing out of your retirement accounts — and taking advantage of catch-up contributions — is one of the most effective ways to accelerate savings in your 50s,” says Vargas. “These contributions may seem modest year to year, but they add up quickly — and with compounding, they can significantly boost your retirement readiness.”

3. Take advantage of a Health Savings Account

Health care in retirement can cost you as much as $172,500 during your lifetime, according to Fidelity Investments’ latest estimate. That’s a lot of out-of-pocket dollars you have to save for. One way is via a Health Savings Account or HSA.

With an HSA, the money you invest can roll over year after year. There is no use-it–or-lose-it rule. Plus, HSAs are triple tax-free. You get a deduction when you contribute, they grow tax-free, and you don’t pay taxes when you withdraw them for qualifying medical expenses. An HSA is only available with a high deductible plan, but if you are healthy and don’t foresee many out-of-pocket medical expenses, HSAs can be a way to amp up your savings.

There are limitations you need to be aware of. For 2025, the limit is $4,300 for self-only coverage and $8,550 for family coverage. If you are 55 or older, you can contribute an additional $1,000.

4. Pay off your debt

Here’s a quick way to boost your savings — pay off your high-interest-rate debt. Whether it's a credit card or personal loan, high-interest debt can eat away at your income and ability to save.

There are several methods to pay down debt, including the avalanche method, in which you pay off the highest interest rate debt first. You make minimum payments on all debts, and any extra money goes toward the debt with the highest interest rate. Once it's paid off, you apply the payment and any excess to the next highest interest rate debt.

The snowball method is another popular way to pay off debt. With it, you pay off your smallest debt first, making minimum payments on everything else. Once the first debt is paid off, that payment goes to the next smallest debt. This is replicated until everything is paid off.

5. Redirect more income to savings

Another strategy to boost savings is to review your spending to identify opportunities to redirect more of your income toward savings. It may seem difficult at first but even little lifestyle changes can be meaningful.

“Trimming discretionary expenses, eliminating lingering debt or even downsizing your home can unlock significant cash flow that you can put toward your goals,” says Vargas.

6. Keep risk in line with the time horizon

As we get closer to retirement, we are trained to pull back and get more conservative. After all, we need to protect the money we’ve saved. But retirement can last decades, which means your money still needs to grow. It can’t do so in investments that are too conservative.

“Shifting too heavily into low-risk, low-return assets like cash or short-term bonds can limit your ability to build the savings you’ll need,” says Vargas.

“While it’s wise to reduce risk gradually as you approach retirement, maintaining a healthy allocation to equities can give your money the growth engine it needs — especially if you’re planning to work into your late 60s or beyond.”

Stick to your newfound savings plan

Opportunities abound to save for retirement in your 50s, whether you trim your budget, take advantage of catch-up contributions or open an HSA. The key is to be disciplined, determined and committed to the saving strategies you choose.

Even saving a little extra each month can have a big impact on your nest egg over the next fifteen years.

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Food prices remain expensive, as beef prices have hit an all-time high, per Newsweek. Cumulative inflation shows the real impact consumers continue to face. Bankrate found prices are more than 24% higher than they were in February 2020.

If you're feeling inflation's squeeze on your finances, you're far from alone. Thankfully, there are ways of cushioning your finances against inflation, and one of the best ways to achieve this is by placing your money in high-yield savings accounts.

Do savings accounts really outpace inflation?

If you open a savings account at a brick-and-mortar bank, chances are you're going to be disappointed. Traditional savings accounts offer a 0.6% APY on average, making it far below inflation's 2.7% rate.

However, a high-yield savings account offers much healthier returns. Some of our top options, such as this one from Newtek Bank, give you a return of 4.35%, well above the inflation rate.

Another perk is that many high-yield savings accounts come with low deposit requirements and no monthly fees. This helps you keep more of your money, which is integral given inflation's impact.

How much can I earn with a high-yield savings account?

Let's take our top pick Newtek Bank, that earns 4.35% APY. Here's how much you would earn in one year for opening the account today:

• $10,000 deposit: $435 in interest
• $25,000 deposit: $1,087.50 in interest
• $50,000 deposit: $2,175 in interest
• $100,000 deposit: $4,350 in interest

As you can see, this approach could help you earn significant gains effortlessly. This calculation assumes there will be no rate cuts in the next year from the Federal Reserve.

While that's unlikely, given the weak job numbers, inflation could prompt the Fed to continue its wait-and-see approach. This is important because high-yield savings accounts come with variable interest rates, meaning that if the Fed cuts rates, it will also drop your rate of return.

What savings alternatives should I consider?

If you're worried about rate cuts eating into earnings, another approach is to open a certificate of deposit. Unlike HYSAs, CDs feature fixed interest rates.

It means if you lock in your rate now and the Fed cuts them later this month, it won't impact you since you have your rate locked in.

You can shop quickly for the best CD rates, using this tool, powered by Bankrate:

There are a few things to keep in mind with a CD. First, many come with terms that won't allow you to withdraw your money until it reaches its maturity date. If you need cash before that time, your penalties could be months of earned interest, negating its benefit.

You can’t add to your balance the way you would with a high-yield savings account, so CDs are best suited for a lump sum you won’t need for awhile — letting you lock it into a risk-free vehicle that outpaces inflation.

Another option is a money market account. These are better-suited for established savers, as many accounts require a minimum balance of $1,000. In many ways, these accounts offer the best perks of checking, in that you can access your money anytime you want with a debit card.

Moreover, you'll gain all the perks of a savings account, including returns as high as 4.35%. This will also allow you to earn more money than inflation takes. However, as with a high-yield savings account, money market accounts come with variable interest rates. If the Fed cuts rates sometime soon, it could lower your returns.

If you're on the fence about savings options, this table can help:

Overall, there are several ways you can save money and stay ahead of inflation. High-yield savings accounts are the easiest, as they come with the fewest restrictions and only take a few minutes to set up.

Best of all, with rates as high as 4.35%, you'll earn a rate outpacing inflation, even if the Fed cuts rates and savings APYs drop. Therefore, if you're feeling inflation's squeeze, the right savings accounts can lessen its impact.

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However, enjoying the best of both worlds comes at a price, and sometimes a hefty one.

This is why it's important to consider the fees in advance to ensure this is the right option to maximize your savings.

Why money market accounts seem appealing

It’s easy to see why so many people opt for money market accounts. Being able to write a check from what’s essentially a savings account seems like freedom. Although it’s less common, some money market accounts even come with a debit card, usually with limits on transactions.

MMAs are also attractive because they sometimes offer higher interest rates than traditional savings accounts. Our top picks for the best money market accounts earn up to 4.35%.

Explore some of the top MMA accounts, using the tool below, powerd by Bankrate:

However, the returns are not as high as those offered on other investment options. Importantly, you might have to keep a certain balance to earn the high interest rate that first attracted you.

Most money market accounts utilize a tiered system tied to balance amounts. For example, you might earn the lowest possible rate on balances up to $9,999 and the highest possible rate on balances over $25,000.

Currently, the average interest rate on money market accounts is 0.59% APY, as of August. High-yield MMAs from online banks can offer interest rates over 4%.

Another bonus with MMAs is that the money should be protected against institutional failure by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration for credit unions.

Protection is up to $250,000 per account ownership type and per depositor, but it’s not a bad idea to check that the financial institution has coverage.

The most common (and costly) fees

Despite the appealing nature of money market accounts, fees can quickly eat into your savings if you don’t pay attention. Some fees can be waived or avoided in certain situations, depending on the financial institution’s rules.

Here are some of the most common money market account fees:

• Monthly fees: Many MMAs come with maintenance fees charged every month, typically from $10 to $25. If you maintain a certain minimum balance or set up qualifying direct deposits, some institutions might waive this fee.
• Fees for excess withdrawals: Many institutions set limits on the number of withdrawals you can make from your MMA in a month. If you go over, you might be charged a fee. Typically, ATM withdrawals aren’t included in limits, but every other type is, including transactions made with a debit card. The maximum number of withdrawals from an MMA is around six per month.
• Minimum balance fees: Keep an eye on your balance because some institutions charge a fee if it falls below a certain amount. This can be as little as $1,000 or much higher, depending on the institution.
• ATM fees: If your MMA comes with a debit card, be wary of using it to withdraw from an ATM. Some institutions charge a fee even when withdrawing from their ATM. If that’s not the case, you can be sure there’ll be a fee when withdrawing from an ATM outside their network.
• Overdraft fees: Like many other bank accounts, MMAs typically charge a fee if you overdraw the account. These fees can range from $30 to $35 per transaction.
• Fees for closing the account too early: Be sure you want the account, and pay attention to the minimum holding period. Some institutions charge a fee if you close your MMA too soon after opening it.

Real-world examples: How money market account fees eat into returns

One of the simplest ways to see how MMA fees can eat into your returns is to check the fees you’re charged in a given year against the interest earned.

For example, if you have a money market account that charges a $10 maintenance fee every month, the $120 in maintenance fees over a year would potentially negate much of the interest earned, especially if you didn’t add anything to your balance.

Now consider your possible earnings: 4.35% interest annually on a $5,000 balance, for example, would earn you $217. So, in this instance, you would save less than $100 a year, given the fees.

Another way fees eat into your savings is through compounding. Every time a fee is deducted from your balance, it means that a lower balance earns less interest in future months, resulting in diminished compounding.

Alternatives: High-yield savings or no-fee MMAs

With so many potential fees eating away at your savings, money market accounts might not be the best option for everyone. However, not every MMA charges fees, so it pays to shop around. Here are some examples of no-fee MMAs:

• Sallie Mae Online Money Market Account
• Synchrony Bank Money Market Account
• Ally Money Market Account
• Discover Money Market Account

While the above options don’t charge monthly maintenance fees and have a $0 minimum opening balance and deposit, they may have other fees attached to them that can easily be avoided.

For example, if you avoid overdrawing the account, you won’t have to worry about overdraft fees, whether or not the institution charges them.

Alternatively, if you don’t care about being able to write checks from the account, you might opt for a high-yield savings account instead. Many high-yield savings accounts offer rates over 4%, making them an attractive alternative to an MMA.

Tips to protect your savings

The most important thing to remember when shopping around for money market accounts is to carefully review the list of applicable fees. Those monthly maintenance fees can be especially hard to avoid — and they can be the biggest culprits when it comes to eating away at your savings.

It’s also important to verify that they have insurance with the FDIC or NCUA. If they do, keep your balance within the insurance limit and track your minimum balance versus any minimum required by the financial institution. Finally, stick to any withdrawal limits placed on the account and monitor interest rates for better deals.

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The wealthy tend to view money differently. Instead of focusing only on spending, they treat money as a tool for ownership, growth and opportunity.

You don’t need to come from wealth to build it yourself. Here are five rules that separate the wealthy from everyone else.

1. They prioritize ownership over consumption

The rich know the best way to spend money is on things that will grow in value or generate income, not just lose worth over time. Assets build wealth; liabilities drain it. A house, for example, is an asset because homes usually rise in value. A car, on the other hand, is a liability because it starts losing value the moment you drive it off the lot.

Investing in assets can mean the difference between a healthy nest egg and an empty bank account later. That might look like buying a duplex and renting out one unit to help cover your mortgage. Or it could mean contributing to your 401(k) instead of overspending on nights out, so your money earns dividends for decades. It might even mean building a side hustle that can grow into a business.

Consuming time or money may be more fun in the short term, but wealth comes from consistently choosing ownership and long-term growth.

2. They let money work for them

One of the most powerful tools for building wealth is available to everyone — compound interest. It’s the process of earning interest on your principal, reinvesting that interest, and then earning even more interest on the total.

The formula is simple; all it requires is time and consistency. The earlier you start investing, the more your money can grow. For example, setting aside just $50 a month from ages 23 to 28 can grow to $3,450.44 (with a 7% return and annual compounding).

If you then increase your contributions to $300 a month at age 28, you’ll end up with $619,391.51 by age 65. Without those early years, you’d only have $577,214.65 — a difference of more than $42,000.

Starting early doesn’t just give you more money; it helps you build the habit of living below your means. Still, it can be tempting to spend or dip into investments. The wealthy know better — they let their money grow untouched. If you leave a job with a 401(k), for instance, the smart move is rolling it into another retirement account, not cashing it out into a checking account.

Compound interest is one of the biggest secrets of wealth — but it can also work against you. Stay in debt, and you’ll find yourself on the losing side, paying more and more in interest instead of earning it.

3. They play the long game

You’ve probably heard about the marshmallow experiment, a psychological test where children were told they could eat one marshmallow right away or wait and receive two later. The kids who held out showed the power of delayed gratification — trading short-term pleasure for a bigger reward in the future.

Wealth works the same way. The most important ingredient isn’t luck or timing — it’s patience. Money needs time to grow whether through investments, real estate or business ownership. Get-rich-quick schemes promise shortcuts but usually waste both time and money.

The wealthy understand that compounding, appreciation and opportunity all take years to unfold. That’s why they don’t chase fast returns; they stay consistent and let time do the heavy lifting. Patience isn’t just a virtue when it comes to building wealth — it’s a requirement.

4. They treat financial literacy as an ongoing practice

Some investing fundamentals never go out of style: invest early, avoid chasing fads and diversify your portfolio. But other factors do change over time. If you don’t keep up with new policies, tax rules or shifts in the market, you could end up making outdated decisions.

That’s why financial literacy is a lifelong habit. Staying informed helps you adapt as the economy evolves, and the right financial adviser can fill in gaps if you don’t have the time or interest to track everything yourself.

A good adviser can also guide you through bigger wealth-building strategies like estate planning, tax optimization and retirement readiness. They can point out if you’re falling short of your savings goals or help you adjust during tough times like job loss or the death of a spouse.

5. They know the power of networks and negotiation

There’s an old saying: your network is your net worth. The wealthy take this seriously. Even at events that may seem dull — like cocktail parties or alumni mixers — they see opportunities to meet a future boss, business partner or mentor.

Connections don’t just lead to jobs. They can help you land better deals, meet the right hiring manager or get advice when you’re changing careers. But building a network isn’t about showing up once and expecting a miracle. It’s about consistency. When people see you regularly, they’re more likely to trust you and want to help.

You don’t need a circle of wealthy or powerful friends to benefit. Your network might come from classmates, neighbors or former coworkers. Anyone you meet has the potential to become a resource if you put in the effort to build genuine relationships.

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At this point, economists and Wall Street alike are pretty convinced that a rate cut is coming. While it might not be a drastic cut, it could have an impact on many consumers’ finances.

As a retiree, you could be wondering what moves to make — or not make — ahead of the Fed’s upcoming September 16-17 meeting. Here are a few things to consider.

Consider your liquidity needs

It’s common for retirees to put money into longer-term bonds and CDs for stability and income. You might be inclined to rush into a long-term CD or bond ladder, given the potential for a September rate cut.

Rachel Gustafson, CFP, CCPS, and investment adviser representative at Financial Investment Team, says that might not be necessary.

“If the Fed does cut rates, we anticipate short-term rates to drop and long-term yields to remain close to where they are now,” she says. “Locking in longer-term rates may seem like the safe bet, but the smarter play is aligning with your liquidity needs.”

What Gustafson suggests is that, above all else, you have enough cash to cover your expenses for the foreseeable future. She also recommends that you not rely too heavily on investments in case there is a negative market event.

“In the next one to three months, high-yield savings accounts are the way to go,” she says. “Many are still paying 4% or more. For funds beyond three months, U.S. Treasuries and short-term CDs are the preferred route, even in light of upcoming Fed rate changes.”

If you’re not sure whether to focus on Treasuries vs CDs, think about your tax situation. Interest earned from U.S. Treasuries is tax-exempt at the state and local level. Even though some CDs might be offering better rates than Treasuries right now, you’ll need to consider the after-tax yield — especially if you’re in a high-tax state.

Choose your bonds strategically

Some retirees might be inclined to load up on bonds in light of a probable rate cut. Joseph W. Spada, CFP and private wealth adviser at Summit Financial Holdings, says that’s not necessarily a bad idea. However, it’s important to choose your bonds carefully.

"When rates drop, bonds that are currently on the market with higher coupons become more attractive, causing their price to rise,” he explains.

“Longer-term bonds that have more years remaining of higher coupon payments are especially attractive, causing their price to rise even more," Spada says. "For this reason, intermediate- to long-term bonds tend to perform well in a decreasing interest-rate environment.”

That said, Spada thinks stocks can also be a powerful tool for retirees at a time such as this, despite their inherent risk.

As he explains, when rates drop, "Companies can borrow at a lower rate and earn a better return on that borrowed money by investing it in their business. This is why it is important to own stocks when interest rates are declining.”

If you’re worried about volatility, you can aim for a mix of growth and dividend-paying stocks in your portfolio.

Make sure your portfolio is resilient and tax-efficient

Though you might be inclined to make major changes to your investment strategy to benefit from rate cuts, Gustafson says that might not be necessary.

“At this point, we don't see an immediate need to adjust portfolios ahead of the Fed’s upcoming decision,” she says. “The goal is not guessing the Fed’s next move. It’s about building resilience. Focus on building a portfolio that will hold up in any rate environment, not just the one that is making headlines.”

Spada agrees. "We advise our retired clients to focus on the total return … not just how much income each investment can produce,” he says. He also thinks tax efficiency needs to be part of the equation.

“Investments with high yields, such as CDs and corporate bonds, are often taxed at ordinary income tax rates and can have lower total returns,” he says. “Growth-oriented investments, like stocks, often benefit from more favorable capital gains tax treatment, reducing a client’s overall tax burden, as well as generating higher total returns."

All told, if you have an investment strategy that’s been working for you all along, you might not need to alter it tremendously to account for the Fed’s upcoming decision.

"Overall, we don't recommend trying to time interest rate moves,” Spada insists. A better approach might be to look at your portfolio holistically and make sure it’s well-balanced and designed to withstand market fluctuations.

Don’t get too caught up in the short term. Even with an interest rate cut looming, Spada insists that thinking long-term is still your best bet.

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Answer: You'll want to find a savings solution that's resistant to rate cuts. That way, you maximize your savings while rates are still higher. However, you don't have much time to act.

The Federal Reserve cut rates at each of its last two meetings. And it's likely they will issue another cut when they meet next week. It means now is an excellent time to capitalize on higher rates before they drop.

Why are the Fed cutting rates?

The Fed issued two rate cuts largely due to a shrinking job market. Although the government won't release the latest job numbers until mid-December due to the prolonged government shutdown, ADP reported an overall loss of 32,000 jobs in November.

When this happens, one way to stimulate job growth is by cutting rates. Doing so makes it cheaper for businesses to borrow money, which in theory would make it more cost-effective to create more jobs.

The problem is that savers will feel the pinch. When the Fed cuts rates, it means savers face lower returns on all savings accounts. It's why timing matters when choosing the right account.

Now is the time to maximize returns before CD rates drop

One route to turn to now that'll protect your money from rate cuts is CDs.

A certificate of deposit features a fixed interest rate. Once you lock in your CD rate, it remains in effect for the entire term. The Fed could cut rates multiple times during your term, and it wouldn't impact your savings at all.

Using this tool, powered by Bankrate, can help you find options that work best for your needs:

And if you are sitting on a wad of cash, I'll show you how a balanced savings approach can maximize yields now while gaining flexibility back to some of your money for future investments.

A strategy that keeps you ahead of the game, with flexibility

One strategy is to open multiple CDs at various terms. Doing so now ensures you lock in higher CD rates to maximize returns. But, it also achieves another positive: You'll gain quick access to some of your money.

Here's how it works:

• Put $25,000 in a one-year CD. A top-performing account is Limelight Bank. You'll earn 4.15% with a minimum deposit of $25,000. In that year alone, you'll earn $1,037.50 effortlessly.
• Deposit $20,000 into a five-year CD. Our top pick is SchoolsFirst Credit Union, with a rate of 4.15%. Over five years, that'll earn you $4,509.04
• Lastly, place your remaining $5,000 into a no-penalty CD. Farmers Insurance Federal Credit Union offers a rate of 4.00% for a nine-month term. This will net you $149.26 in interest earned for a mere six months.

Overall, this approach helps you earn $5,695.80 for a few minutes of work setting up the accounts. Best of all, you'll only tie up half of your money for the next five years. The rest you'll have back within the year, and you can reconsider investment or savings options, depending on how the market does.

What I would caution with this approach

CDs are not a flexible savings vehicle for the most part. Term-based CDs require you to keep the money saved until maturity, or face significant withdrawal fees. For shorter-term CDs of a year or under, this could equate to a few months of interest earned.

Meanwhile, long-term CDs of five years could face penalties of up to one year of interest earned. Therefore, only take this approach if you're comfortable setting aside $25,000 for the next five years.

You must act soon, as more rate cuts are likely coming. Therefore, if you want a risk-free savings option resistant to rate cuts, this approach helps you maximize returns now, while rates are higher.

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“That set a precedent, and I thought ‘I’m going to do that for my grandchildren,’” she adds. Today, with five grandchildren aged from 12 to 3 years old, and a sixth on the way, she has been socking away about $10,000 a year per child.

She’s not alone. Baby boomers are the most well-heeled group of Americans, holding $82.4 trillion in wealth, according to the Federal Reserve. With that kind of moolah, many are choosing to transfer some of that wealth to their grandchildren while they’re still alive and kicking, according to Susan Hirshman, director of Wealth Management for Schwab Wealth Advisory and Schwab Center for Financial Research.

“Years ago, all anyone wanted to talk about was, ‘how much money can I make,’” she says. “Now the conversation is more about, what do I want to use my wealth for, and we’re talking a lot about their legacy while they’re still alive and seeing the benefits.”

Education for grandchildren has become a priority, she says. There are a handful of ways grandparents can help foot the bill totally or partially to fund a grandchild’s education, but financial advisers are quick to warn: Don’t drain your retirement fund to do it.

“You can finance education. You can’t finance retirement,” Hirshman says.

1. Let’s get started

Rule No. 1: You have to make absolutely sure you are saving correctly for yourself first, accounting for your lifestyle and future wants and needs, as well as having an emergency fund in place and reserves to cover medical and other unexpected needs. No one wants to outlive their finances.

2. The talk

Rule No. 2 is communication with the parents, according to Hirshman. “You need to understand what their plans are and how your plans and their plans meet,” she says. “Maybe parents don’t want you to do it or have other ideas.” Know too that some steps you might take to help fund college could affect financial aid eligibility for parents or the grandchild.

3. Should you just write a check?

Yes, that is an option. But it’s not the smartest choice when it comes to taxes. If you don’t care about tax deferrals and incentives, remember that the IRS has gift-giving rules. You can bypass those exemptions by writing the check directly to the school, according to the IRS, but that applies only to tuition.

4. The 529 plan

Let’s turn to tax-free options. The most common savings approach is the 529 Plan. These accounts allow you to add as much as $19,000 each year, equal to your full annual gift exclusion, without being liable for capital gains taxes when withdrawing for qualified education expenses.

Contribution limits and deductions vary from state to state, and you’re allowed to have 529 plans in more than one state. The IRS won’t be involved unless you exceed the annual gift allowance. There are no federal tax deductions, but many states offer deductions for in-state plans.

Besides tuition, those funds can be used for fees, books, computers and supplies, as well as tutoring, studying abroad or post-secondary education and more. And they’re transferable to another beneficiary, such as a younger sister or cousin.

5. Custodial accounts

This is another savings account path with terrific pros and some serious cons to opening them for children. Under the Uniform Gifts to Minors Act (UGMA) and the Uniform Transfer to Minors Act (UTMA), these accounts allow anyone to contribute cash, stocks, bonds, CDs and several other securities with no limits to the total funds held in the qualified education expenses-only account.

Grandparents — actually anyone — can contribute as much as the $19,000 annual gift tax exclusion per child, without encountering the attorney fees and other associated costs tied to trusts. But these are taxable investment accounts and the grandparent is the custodian of the account until the child reaches adulthood. The assets then transfer to the beneficiary, who can use them however they wish. College? Maybe not.

“We’ve all heard the story of the kid saying, ‘I know you wanted me to go to college, but I'm going on a motorcycle trip across Africa instead,’” Hirshman says.

6. Coverdell accounts

The Coverdell Education Savings Account is much like a 529 plan, but with income and contribution limits that might offer a good starting point for those with lower modified adjusted gross incomes. In 2025, those were $110,000 for single filers, and $220,000 for married couples.

Unlike 529s, Coverdell contributions cannot exceed $2,000 per beneficiary per year, according to the IRS. While two sets of grandparents — or anyone — may open separate accounts for the same child under age 18, the total annual contribution is still capped at $2,000. Also, when the grandchild turns 18, the account and distributions are theirs.

Coverdell accounts can be combined with other education savings accounts, or can be rolled over into a 529 plan without tax implications if it’s for the same beneficiary.

7. Irrevocable education trust fund

Generally used as part of a larger estate plan, it gives grandparents far more flexibility than 529s or Coverdells, and one trust can be created for a number of grandchildren. The funds are legal arrangements that can generate income that can be taxed, including capital gains that must be addressed by the trustee and later by the beneficiary after the trust is handed over. They’re not as tax-efficient as a 529 or Coverdell, but they can help reduce grandma’s taxable estate by excluding the assets from her estate.

Typically, there are no investment restrictions unless they’re spelled out in the trust. And they do fall under federal gift tax laws, whether it’s an annual exemption or the lifetime exclusion. That’s why it’s important to have a trustee that you, well, trust.

These aren’t cheap, requiring trustees, lawyers and paperwork, not to mention ongoing maintenance. But the assets are protected in trusts and the flexibility they offer can be compelling.

8. Pay off the student loan

Now there’s a surprise. The grandchild takes out loans to pay for school and lo and behold, her grandparents take over the payments (no tax deduction) when she graduates.

9. Reevaluate your plans

In a perfect world, everything you plan in 2025 will play out for the next 20 or 30 years. But, alas, we do not live in a perfect world. That’s why it’s important to update your plans on a consistent basis, double-checking that you’re still on track to meet all your financial and lifestyle goals. Who knows, maybe changes will be positive.

10. Just do it

Yes, there are many hoops you can jump through to gain tax deferrals and savings, but grandparents can also just do it. That’s not to suggest skirting tax laws, but giving your grandchild money here and there over the years, earmarked for college, works too. Of course, it opens the door to dollars getting spent on other things, but at least you tried.

Note: This item first appeared in Kiplinger Retirement Report, our popular monthly periodical that covers key concerns of affluent older Americans who are retired or preparing for retirement. Subscribe for retirement advice that’s right on the money.

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I've been a big fan of high-yield savings accounts. They're easy to set up, offer returns well above 4%, and I don't have to worry about being nickel-and-dimed by my bank.

However, if rate cuts happen, it will impact these accounts. Therefore, like you, I'm looking at changing where to place my emergency fund before the fall.

How CDs shield your money when rates fall

Your emergency fund should cover from three to six months of expenses. However, it doesn't hurt to save even more, as layoffs continue to impact many sectors of the economy. Sometimes, it can take from six months to a year to find a new job.

According to the U.S. Bureau of Labor Statistics (BLS), the median duration of unemployment in July was 23.6 weeks — just under five months. Keep in mind that this figure includes everyone who is unemployed, even those only passively looking for work.

For many professionals, the job hunt can stretch much longer.

With this in mind, if you feel comfortable you have enough saved, you can take a portion of your savings and invest it in a certificate of deposit. CDs come with fixed interest rates, meaning if the Fed cuts interest rates, it won't impact you.

Explore some of today's best CD rates and terms here:

Key factors to weigh before choosing a CD

There are a few things you'll want to consider before locking one in. First, make sure you don't need that money for the duration of the CD's term, or you'll incur a penalty if you need to withdraw it before maturity, negating a substantial part of the interest you earned.

Two, keep an eye on inflation, which sits at 2.7%. However, the Bureau of Labor Statistics notes inflation has increased 22.7% since January 2021, while wages only rose 21.5% during this same time, creating a gap that's making it tougher for people to keep up. One way to correct this is by investing in a savings option that far outpaces inflation.

If you want to lock in rates before they drop with quick access to your cash, my suggestion is to do a short-term CD, such as a year or less, or a no-penalty CD. I'm doing a no-penalty CD because it allows me to lock in a rate well above 4%.

Many banks allow you to withdraw your money when you need to, although you usually must keep the initial deposit in the account for the first seven to 30 days, depending on the bank.

If you're seeking other options, here's a breakdown of risk strategy based on different savings vehicles and goals for each one:

The only reason I wouldn't consider a CD is if you're in the process of building your emergency savings. In this case, I would still recommend a high-yield savings account because, unlike CDs, you can make continuous deposits.

Here's a great option to consider:

When a money market account makes sense

Money market accounts are also wise options to consider. They work like a hybrid savings/checking account in that you can earn a high rate of return and have quick access to your cash through debit card and check writing capabilities.

However, some money market accounts require a higher deposit, usually around $1,000. If you're new to building your emergency savings, I would consider them once you're more established, given that many require minimum balances.

Protect your savings from rate cuts with flexibility

Ultimately, rate cuts might be coming this year. It's the best time for savers to consider Fed-resistant options like CDs.

If you're worried about having access to your cash, consider a no-penalty CD. You'll get the cushion of shielding your money from rate cuts, with the ability to access it if you need to.

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CME FedWatch projects a 92% chance of a quarter-point rate cut when the Fed meets in September. If this happens as projected, it will impact savings rates. When the Fed cuts rates, it also drops rates on all savings vehicles, from CDs to high-yield savings accounts.

With this in mind, if you're a saver who hates surprises, I have a tip for you. Doing this helps you earn guaranteed returns and lock in a high rate now before the Fed makes its next move.

Lock in a high rate before rate cuts hit

CDs don't offer the ease of accessing your cash, like money market accounts or high-yield savings accounts. However, they do come with a feature that proves handy in situations like this: A fixed APY.

With a fixed APY, you won't have to worry about what the Fed does. Once you lock in your rate, it's the return you'll earn even if rate cuts happen.

Now is an excellent time to sign up for one, with rates above 4% for many accounts. Using this tool from Bankrate, you can shop and compare options fast:

Which CD term works best for me?

Your choice comes down to your savings goals and risk tolerance. If you have cash on hand and want to earn a high rate for years, our best 5-year CD rates are a wise option to consider.

For example, if you deposit $50,000 into a 5-year CD from Lafayette Federal Credit Union at 4.28%, you'll earn $11,655.97 in interest risk-free over the term.

If you’d rather see how inflation plays out before committing long-term, you might be more inclined to a short-term CD. These are beneficial if you want to see how prices play out for the next year, as you can move your money if inflation increases to the point where 4%+ returns are not netting you enough of a return.

This is where our best one-year CD rates come into play. Locking one in now ensures you receive a high rate that won't change if the Fed cuts rates.

Using the same deposit above of $50,000, if you sign up for a one-year CD with Colorado Federal Savings Bank at 4.30%, you'll earn $2,150 in interest that first year.

And, you have the option in a year to pivot to other investments that earn you more, especially if prices keep rising.

Things to keep in mind with this CD approach

CDs are a lock your money away and forget about it type of savings vehicle. If you need to access money before your term expires, you pay an early termination fee. Banks charge penalties based on your CD maturity. If you have a one-year CD, penalties range from three to six months of interest.

Meanwhile, for five-year CDs, penalties can creep as high as one year of interest earned. Therefore, make sure you can live without this money comfortably before you sign up.

Also, some banks will renew your CD once it reaches its maturity. Set a reminder on your phone a week before its maturity date, as it gives you more time to shop around to see where rates are and whether you want to try another savings vehicle.

Ultimately, CDs are a smart savings option if you want to lock in a high rate now and not worry about upcoming rate cuts. Not only will you receive a guaranteed return, but you will have peace of mind knowing your CD is outpacing inflation.

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The Fed meets next week, with CME FedWatch projecting a 95% probability the Fed will cut rates by 25 basis points. Why? They're concerned that the lack of job growth outweighs the rising costs from inflation.

With this in mind, you'll want to devise a plan now, with the expectation that there will be at least one, potentially two cuts happening this year. Thankfully, high-yield options still hold the promise of higher returns, even with a slight dip from rate cuts. Here are your best options to consider.

CDs: A Fed-resistant way to save

CDs won't earn you the highest rates of return, but they come with a protection other savings options don't have: A fixed APY. That means if you lock in a longer-term CD now, the rate you lock in will be the same rate you carry throughout the term.

So, even when the Fed cuts rates, as our team projects, you'll stay ahead of the curve, with many CDs earning over 4%. Short-term CDs, such as a six-month option from ableBank, earn you a 4.50% return on your deposit.

Using this Bankrate tool can help you compare and find the best CD rates for you:

A few things to consider with a CD:

• You can't add to your initial deposit
• Early termination penalties are steep if you need access to your cash
• Some banks renew your CD automatically, so set a reminder before it matures

Who they work best for: Risk-averse savers or those nearing retirement who want a guaranteed rate of return that won't change with Fed policy.

Keep things fluid with a high-yield savings account

High-yield savings accounts (HYSA) offer more fluidity. You can access your money whenever you need to, unlike CDs, which keep your money tied up until maturity.

Right now, you can earn well above 4% for most accounts. Our top pick, Newtek Bank, offers you returns of 4.35%

A few things to remember about HYSAs:

• They feature variable interest rates, so if the Fed cuts rates, your returns will be lower
• Some banks have minimum balance requirements or you'll have a monthly fee
• Most of the best rates come from internet banks, so it's wise to switch all your accounts to them for easier cash access

Who they worked best for: Savers wanting quick access to their cash for unexpected expenses or to quickly pivot to other strategies.

Reach retirement benchmarks with investments

Historically, a diversified portfolio of stocks, mutual funds and bonds earns you a higher return than CDs or HYSAs.

You can also tailor your investment strategy based on your risk tolerance and retirement goals. Many brokerages have advisory services that can help you reach your goals and suggest options if performance isn't optimal.

Shop for adviser options with this Bankrate tool:

Things to keep in mind with investments:

• Returns are not guaranteed
• Harder to access your cash if you need it, with substantial tax consequences
• Fee-based advisers can eat into returns

Who they work best for: Savers who already have an emergency fund of six months of expenses, who are also looking to reach retirement goals and keep their money ahead of inflation.

Ultimately, now is a great time to review your savings and retirement goals. Rates remain high, at least until the Fed starts cutting rates next week. Being proactive will help you maximize savings opportunities while keeping ahead of rising costs.

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Savers are also feeling the squeeze with lower returns on the horizon. The Federal Reserve cut rates at its October meeting and will likely do so again when it meets in December.

With these things in mind, does a long-term CD make sense amid rising inflation and a rate cut?

Inflation projections for 2025

Inflation will overachieve its projections for 2025. Fed chair Jerome Powell said, “Everyone that I know is forecasting a meaningful increase in inflation in the coming months from tariffs because someone has to pay for them."

How much do they expect core inflation to rise in 2025? At the June Fed meeting, the Federal Open Market Committee (FOMC) reported that it expects inflation to increase to 3.1% in 2025, up from the March projections of 2.8%.

If you're wondering what the Fed will do at its next meeting, December 9-10, it's likely to issue its third rate cut of the year.

Why? The jobs reports have been less than stellar. And ADP's recent numbers show 32,000 jobs were lost in November, adding to the concern.

One way to stimulate job growth is through rate cuts. Doing so lowers borrowing costs for companies.

At the same time, it also lowers the returns you'll earn on your savings rates. This means now is the time to lock in higher returns while they are available.

Savings strategies to keep ahead of inflation

There are several ways to maximize your savings when inflation rises. The first is to lock in a long-term CD. CDs are market-resistant in that they come with fixed interest rates.

It means if you choose a five-year CD and the Fed decides to cut interest rates next week, the rate you have won't change until after your CD matures.

And some five-year CD rates are over 4%. Use the Bankrate tool below to find and compare CD options fast:

There's another benefit to a long-term CD. Mark Hamrick, a senior economic analyst with Bankrate, notes, "If opting for a multi-year rate is a sound option for you, one can avoid the situation where maturing short-term assets will need to be reinvested, possibly at lower rates down the road."

And he's right. A five-year CD allows you to earn a guaranteed rate of return with no work on your part. Moreover, if the Fed cuts rates again, as many economists project, now's the time to lock one in while rates are outpacing inflation.

The one thing to note about long-term CDs is that you can't touch that money. If you withdraw it before the maturity date, you're likely paying at least a year of earned interest, lowering your returns.

Short-term alternatives that offer flexibility

Long-term CDs should keep you ahead of the game, at least for the rest of 2025. However, they're also best for conservative savers or those nearing retirement, who want a risk-free way to grow their money without access to it.

That said, what if inflation exceeds expectations and you want the flexibility to pivot to more traditional investment strategies, such as mutual funds or a diversified stock portfolio, which offer higher returns and risk?

If this applies to you, then consider a no-penalty CD. No-penalty CD rates average over 4% and have a shorter maturity window, between six and 14 months.

The benefit of these is that you can still lock in a rate while they're higher, but you also have the flexibility to pivot to other investments fast. That way, if the Fed cuts rates and prices continue to rise, you can find different solutions that maximize returns since this scenario will squeeze savers anyway.

The main consideration with no-penalty CDs is that once you fund them, you cannot access the money for at least a week, although some banks extend that to the first 30 days. Some also restrict withdrawals to once per month, while other banks allow you to take it all after the initial holding period.

However, if you're looking for a quick way to pivot, this could be a smart option as you won't feel the immediate impact of rate cuts. Regardless of what strategy you use, CDs can shelter your money from the rising costs of everyday items.

With the Fed likely to cut rates next week, now is the best time to take advantage of the higher rates while they're here.

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Many Americans are re-evaluating where they keep their cash, shifting away from traditional checking and savings accounts in search of better returns.

Consumers are increasingly moving money into higher-yield options such as money market funds, brokerage accounts and online savings platforms that offer more competitive rates.

While cash reserves remain strong overall, savers are becoming more strategic — transferring excess funds into accounts that can keep pace with inflation, even if it means taking on more risk.

With interest rates still elevated and the Federal Reserve's next policy meeting approaching, this shift might reflect a broader rethinking of savings strategies and long-term financial security.

Let's explore why more savers are making the switch and what they’re choosing instead.

Why more savers are shifting from passive to active strategies

According to the JPMorgan Chase Institute’s latest Household Finance Pulse, which draws on data from 4.7 million Chase households, cash held in higher-yield financial vehicles has been steadily increasing — even among lower-income earners.

The analysis shows that households earning less than $35,000 per year saw total cash balances grow at an average annual rate of 5% to 6%.

These savers are increasingly shifting their money into more rewarding accounts, signaling a broader awareness of how to protect and grow savings in today’s high-interest-rate environment.

The findings suggest that while Americans are still holding onto cash, they’re also being more strategic, moving it to places where it can work harder.

How interest rates and inflation are pushing savers to act

Higher interest rates

The Federal Reserve’s rate hikes have made it more attractive to move money out of traditional savings and checking accounts. While many banks still offer low yields of 0.01% to 0.10% on standard savings, money market accounts and CDs are delivering returns north of 4% in some cases.

Beating inflation

Persistent inflation has led many consumers to question whether their money is truly “safe” if it’s losing value over time. Moving cash into investment income accounts is a way to preserve and potentially grow your purchasing power in the future.

More financial savvy

After years of financial uncertainty, Americans are becoming more intentional with how they manage money. Budgeting apps, online financial tools and social media education have contributed to a more informed and empowered saver.

Explore and compare some of today's best savings options with the tool below, powered by Bankrate:

Where savers are putting their cash for better returns

The most popular alternatives to traditional bank deposits include some of these options:

• Money market funds: Offering both liquidity and competitive yields, these funds are increasingly popular for storing emergency savings and short-term cash.
• Brokerage accounts: With access to ETFs, dividend stocks and bonds, brokerage accounts offer a path to longer-term investment income, though they come with market risk.
• Certificates of deposit (CDs): CDs are safe and predictable, but they lack flexibility if you need funds early, since there’s often an early withdrawal penalty if you need to access funds before the CD’s maturity date.
• High-yield savings accounts (HYSAs): Online banks are currently offering rates upward of 4%, which is significantly higher than what most brick-and-mortar institutions provide.

Pros and cons of moving money to higher-yield accounts

Shifting your savings into investment or high-yield accounts can offer clear benefits — but it’s not without tradeoffs. Here are some pros and cons to consider.

Pros:

• Significantly higher yields: Moving cash out of a traditional checking account and into a high-yield alternative can significantly improve your earning potential.
• Opportunity to stay ahead of inflation: With inflation eating away at purchasing power and interest rates remaining relatively high, people want to do more than let their money sit.
• Incentive to build longer-term financial plans: Whether you want to grow your retirement savings or ensure your financial stability a few years down the road, moving money to high-yield savings or investments could help with your long-term plans.

Cons:

• Market volatility for brokerage accounts: The market fluctuates, and not every investment is a guaranteed win.
• Lack of FDIC insurance in some investment vehicles: Investment-based accounts such as brokerage accounts or even money market mutual funds are not FDIC insured, which means you could lose money during a market downturn.
• Limited liquidity with CDs or certain investment funds: Even with more stable options such as CDs, you’ll face penalties if you withdraw your funds early.

What this says about the economy

The data suggest that this movement reflects growing consumer confidence or at least a willingness to engage more proactively with financial tools.

While some Americans are still cautious, the shift points to a desire to not just save money, but to make it work harder.

That said, total cash reserves haven’t disappeared; they’re simply being reallocated. This indicates that consumers still value liquidity, especially during uncertainty about interest rate policy, inflation and global market trends.

Should you move your cash for better returns?

That depends on your financial goals, risk tolerance and how much effort you're willing to put into optimizing your savings. If your current savings account is earning less than 1%, it's worth shopping around.

Many online banks and credit unions offer far more competitive rates with no monthly fees or minimums. If you're sitting on extra cash beyond your emergency fund, consider putting some into a short-term CD or a high-yield money market fund to capitalize on current rates.

It’s also important to consider your timeline. If you’re saving for a big purchase in the next year or two, liquidity matters. In that case, a HYSA or money market account might be best.

If you’re saving for a long-term goal such as retirement, moving excess funds into a diversified brokerage account could make sense if you're prepared for some market fluctuation.

Lastly, think about how comfortable you are with risk. Not every option offers guaranteed returns.

Before moving money around, make sure your emergency fund is intact, and your financial basics are covered. From there, you can start optimizing for yield.

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In fact, you might already be participating in one of the newest personal finance trends: revenge saving. Revenge saving is exactly what it sounds like. It’s a form of bouncing back financially.

After months (or even years) of overspending, emotional shopping or living in financial survival mode, people are fighting back by saving fast and furiously. It’s a trend that’s gaining momentum and for good reason. Let’s explore why revenge saving is resonating with so many Americans right now.

What is revenge saving and why is it trending now?

Revenge saving is the financial equivalent of a wake-up call. After a season of overindulgence, distractions or unexpected expenses, people are motivated to aggressively rein in spending and boost their savings.

Think of it as the answer to lifestyle inflation or simply realizing your current savings trajectory won't support the kind of retirement or peace of mind you're aiming for.

So what's driving the shift?

Spending fatigue

After years of raising kids, investing in homes and navigating career ups and downs, many people are tired of always "managing." Between vacations, home upgrades, gifts and helping adult children, it's easy to slip into financial autopilot until something reminds you to hit the brakes.

Economic uncertainty that isn't going away

Even if your income is solid, prices keep climbing. Groceries, insurance premiums, utilities and more all add up. Add in volatile markets at times and questions about the future of Social Security. You'll see it's no wonder people are looking to take more control.

According to a recent retirement study, 64% of Americans say they worry more about running out of money than death, and 62% feel they aren't saving as much for retirement as they'd like.

A new desire for simplicity and security

Revenge saving isn't just about stockpiling cash. It's about reclaiming clarity and calm. For many, it's a path to feeling more prepared and less stressed, especially heading into retirement years or major purchases like downsizing to a new home or finally taking that dream trip.

How to use revenge saving to reach your money goals

You don't have to go on a spending fast or cancel every streaming subscription to see real results. Here's how to embrace revenge saving in a sustainable, realistic way.

1. Identify your financial goals to stay focused

Do you want to retire earlier? Rebuild an emergency fund after a few rough years? Save for a wedding, home remodel or grandkids' education? Write it down. Your "why" should be more than a number. It’s a vision of the lifestyle you want to protect or create.

2. Watch for hidden spending habits that add up

You've worked hard, so it makes sense to enjoy life. But over time, expenses quietly pile up. Subscription services, dining out more frequently and tech upgrades are all habits that often go unnoticed.

Trimming back even a few of them can free up hundreds a month without sacrificing comfort.

3. Jumpstart your savings with a focused 30-day goal

Try a 30-day low-spend challenge where you focus on saving in one area like skipping restaurants or delaying non-essential purchases. The goal is to reset habits, not eliminate all enjoyment.

4. Automate your savings to stay consistent and on track

Consider setting up separate savings accounts for different goals such as vacations, home maintenance, medical expenses, etc. Then, automate your savings with small weekly or bi-weekly transfers. It's easier to stay motivated when you see those buckets grow.

Data from Vanguard’s How America Saves 2025 report shows that 45% of retirement-plan participants increased their contribution rates last year.

Nearly half of Americans rely on employer-sponsored plans and personal savings for their retirement income. Make sure your automated system includes sending a portion of each paycheck directly into your 401(k), IRA or Roth IRA.

How to stay the course without feeling deprived

Let's face it, strict budgets don’t stick unless they feel doable. If revenge saving starts to feel like a punishment, chances are you won’t stick with it for long. That's why it's important to strike a balance between discipline and enjoyment.

One effective strategy is to build in smart rewards. When you reach a savings milestone, whether that's padding your emergency fund, contributing to your IRA, or paying off a credit card, give yourself permission to celebrate in a meaningful but budget-friendly way. Maybe that's treating yourself to a nice dinner, planning a day trip or setting aside a small amount of "fun money" each month that you can spend freely and without guilt. These positive reinforcements can help make saving feel empowering rather than restrictive.

Tracking your progress can also keep motivation high. Whether you use a budgeting app, a spreadsheet or a visual tracker on your refrigerator, seeing your savings grow can give you a tangible sense of accomplishment. It reinforces that your efforts are paying off, even if the changes feel small at first.

It also helps to bring your household into the conversation. If you’re sharing finances with a spouse or supporting adult children or aging parents, discussing your goals together can help prevent miscommunication and create shared accountability. When everyone is on the same page, it's easier to stay focused and avoid the temptation to stray from your plan.

Revenge saving is about control, not sacrifice

Remember that revenge saving isn't about depriving yourself, but about becoming more intentional. That means prioritizing quality over quantity and spending money on things that truly matter to you.

When you're clear on what adds value to your life, it becomes easier to cut out the noise and focus your resources where they count most.

Where do you think you land when it comes to spending and saving? See how your mindset compares to other readers and take the quick poll below.

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Among the new law’s many provisions are benefits for parents, like a boosted federal child tax credit and an enhanced adoption tax credit. But what provisions specifically address your child’s finances?

Some may help your child better afford education, including tuition expenses or school choice. Still others introduce a new type of “kid savings account.”

Here are three ways the Trump megabill will impact your child’s finances.

Related: 10 Tax Breaks for Middle-Class Families Claiming the Standard Deduction

1. Trump accounts for children

Perhaps you’ve heard about the new type of savings accounts introduced in the OBBB: “Trump Accounts.” Supporters say these are designed to help save annually for a child’s future homeownership, educational, and even entrepreneurial needs.

According to the OBBB, Trump Accounts will:

• Allow parents, relatives, and others to contribute after-tax dollars (up to $5,000 per year) in a child’s name.
• Permit savings to grow tax-deferred until the child reaches 18.
• Give children born in the United States between 2025 and 2028 seed money from the federal government in the amount of $1,000 in their accounts.

Supporters of Trump Accounts say eligible children can have one opened for them as early as July 2026.

As Kiplinger reported, multiple companies may already be on board in terms of voicing support for Trump Accounts. CNBC reported that executives from Dell, Uber, and Goldman Sachs, to name a few, attended the Trump administration's "Invest America Roundtable” held at the White House last month.

While several companies reportedly expressed support for the newborn investment program, Dell reportedly pledged a $1,000 match for its employees' children into Trump Accounts under the new tax provision.

For more information, check out Kiplinger’s article, The GOP Wants to Auto-Enroll Your Child in a 'Trump Account' for Savings.

2. 529 education plan for school students

The OBBB also changed the rules around 529 plans for kids. Here’s a quick overview of some of those changes:

• Currently, parents can withdraw up to $10,000 annually, tax-free, for K-12 tuition expenses. Starting tax year 2026, under the OBBB, individuals will be able to withdraw up to $20,000 annually.
• Parents can also deduct more types of K-12 expenses. For instance, books and standardized test fees (like the SAT or ACT) are “qualified expenses” under the new law for 529 plans, as are online learning materials, certain tutoring fees, and dual enrollment fees for college courses taken in high school.
• More post-secondary expenses are included as qualified expenses under the new law. For example, the OBBB allows withdrawals for workforce credentials programs and continuing education courses.

The last point may be particularly advantageous if your child decides to change careers post-college or needs a certificate to enter the workforce.

But when it comes to education savings accounts, there’s more than just 529 plans or even Trump accounts. Coverdells may be used if you meet certain income limits. These special savings accounts allow you more control over your investment options compared to 529s.

Check out Kiplinger’s report for more details: Coverdell ESAs vs. 529 Plans: Which Should You Choose?

3. K12 expenes: Private school vouchers

Another change in the OBBB involving children is a provision dealing with private school voucher tax breaks. These voucher programs use publicly funded scholarships that allow students to attend private schools.

The OBBB provides a dollar-for-dollar tax credit for donations made to private K-12 voucher programs.

• The donation must go to a “Scholarship Granting Organization” (SGO) to count for the tax credit.
• SGOs are nonprofit organizations that distribute donations to students through scholarships, which can pay for private school tuition, books, and homeschooling costs.
• The tax credit is worth up to $1,700 of adjusted gross income.

While the new provision promotes private school choice, some states won’t get the tax credit.

According to the National Education Association, private school vouchers have appeared on state ballots 17 times and were rejected by voters. Colorado, Kentucky, and Nebraska are just a few of the recent states that did not approve.

For more information on who would qualify for the scholarships, check out Kiplinger’s report, 'Unprecedented' Private School Voucher Tax Credit in Trump's Megabill.

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The worries are for good reason. Even one of those issues can erode savings, forcing retirees to stretch their money more than can easily last during what could be a more than twenty-year period.

Fears of outliving savings are getting worse this year amid uncertainty brought on by tariffs and changes to Social Security.

According to the 2025 Protected Retirement Income and Planning (PRIP) Study, a nationwide survey of both consumers and financial advisors conducted by IPSOS, 54% of Baby Boomers and Gen-Xers are fearful of outliving their savings in retirement, up from 48% in last year’s survey.

As a result, some people are delaying retirement, collecting Social Security benefits earlier than planned, or seeking guaranteed income to give them peace of mind in retirement.

Others are realizing that they will have to save more to ensure they can live comfortably in retirement.

How much more? Seniorly, an online marketplace for senior living communities, pegs the average gap at about $115,000. That covers the difference between what older adults’ projected spending in retirement will be and what they’re likely to bring in from Social Security, savings and investments.

That gap, which Seniorly says is present in 41 states and Washington, D.C., is worse depending on where you live.

Seniorly analyzed the latest available data on life expectancy at age 65, Social Security income, household net worth and cost-of-living metrics to determine in which states retirees will see the biggest shortfalls.

The five places where you're most likely to outlive your savings

If you live in these four states, and Washington, D.C., expect to need to save a lot more, according to Seniorly’s analysis. High living expenses and health care costs are largely to blame for the shortfall between expected savings and what you'll need to live.

#1 New York

Shortfall: $448,000

#2 Hawaii

Shortfall: $417,000

#3 Washington, D.C.

Shortfall: $407,000

#4 Alaska

Shortfall: $342,000

#5 California

Shortfall: $337,000

What you can do if you face a shortfall

If you are facing a retirement savings shortfall, there are ways to shore up money so that you can have the retirement you dreamed about.

Pushing out your retirement date can be an effective strategy. Even delaying retirement for six months or a year can have a big impact on the amount of money you can save.

Saving more in a tax-advantaged retirement account, such as a 401(k) or IRA, while you are still working (and taking advantage of catch-up contributions if you are over the age of 50) can also boost your retirement nest egg.

Downsizing once you are in retirement, cutting your budget, or considering working part-time are also effective ways to increase your cash flow in retirement.

Regardless of what you do, it's important to go in with your eyes wide open, which means knowing your numbers.

Understand how much your lifestyle costs, how much income you'll bring in each month and how much you have saved. The more you plan, the better off you'll be when you do retire.

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Arguably, the best option to achieve both is a no-penalty CD. As its name implies, you can store your money away, as no-penalty CD rates earn well above 4%, with access to your cash when you need it.

That way, if the Fed does cut rates sometime this year, you can lock them in when they're still high and have the flexibility to find better investment opportunities if inflation rises.

So, what's the catch, and is this the best savings strategy for you to employ? Let's dive in.

How a no-penalty CD can help you

Let's start with the good:

• You'll earn rates as high as 4.34%
• Terms are short, giving you time to pivot investments if the Fed cuts rates
• You'll have access to withdraw some of your cash fee-free
• They're easy to set up

The pros indicate this is a great savings option if you want to tuck away your money for a short time, earn a rate outpacing inflation and have quick access to your cash. Whether you have an upcoming expense you want to earmark some money for or want a risk-free way to diversify some of your savings, a no-penalty CD offers it.

If you're interested in trying one, the tool below powered by Bankrate, can help you compare options from multiple banks quickly:

What to consider with this CD

As its name implies, no-penalty CDs come with the option to withdraw some of your cash should you need it during the term. However, it isn't as flexible as a high-yield savings account when it comes to access.

Usually, you'll need to keep all of your money in the account for at least seven days, up to 30 days with some banks, after funding it. For most savers, this isn't a deal-breaker since the intention is to take advantage of the higher rates of return. And the longer you keep it in, the more you'll earn.

Moreover, some banks and credit unions restrict how often you can withdraw money. Some will only allow you to do it once per month, while others allow you to take it all after the initial holding period.

Another thing to keep in mind is that some banks automatically renew CDs once they reach their maturity date. With this in mind, set a reminder on your calendar or phone a week before it matures, so it gives you time to investigate other options.

If you decide to switch to a high-yield savings account down the road, this tool from Bankrate can help you compare and find a suitable option:

Will the Fed cut rates?

While the future remains murky, some are projecting that the chances of upcoming rate cuts are increasing. Chief among them is Oxford Economics, which states there's an increasing chance of the Fed cutting rates by up to 50 basis points in December.

However, that isn't because the economy will be in a strong place.

"We do see a growing risk that the first move is larger, i.e., 50 basis points, because we think the Fed at that point may have some catching up to do with the labor market," Nancy Vanden Houten, lead U.S. economist at Oxford Economics, told Fortune. Her statement indicates that the tail end of this year could see the Fed coming to rescue a dwindling labor market.

If the Fed cuts, it impacts savers by way of lower rates. The good news is that if you have a no-penalty CD locked in, it won't impact your earning potential.

And you gain access to your cash quicker. That way, if inflation rises, you can pivot and put your money in an investment that could potentially keep you further ahead of rising costs.

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But what you may not know is how the Trump megabill is expected to affect parents. For instance, some well-known federal tax breaks, like the federal child tax credit, will be boosted. Others, including the personal and dependency exemption, are disappearing forever.

Here are three changes parents should look out for in the OBBB in 2025.

Related: 10 Tax Breaks for Middle-Class Families Claiming the Standard Deduction

1. Child tax credit in ‘Big Beautiful Bill’

Under the OBBB, the federal child tax credit (CTC) has increased. Prior law allowed a credit on taxes up to $2,000 per qualifying child under the age of 17. The new law allows up to $2,200.

However, the new child tax credit amount comes with a couple of significant caveats:

• The $200 increase only applies to the nonrefundable portion of the tax credit, meaning that your taxable income factors in. Married filing joint couples with $400,000 or more (single filers $200,000 or more) will not be able to claim the full credit.
• A Social Security Number (SSN) is required for parents or guardians claiming the tax break. Before the OBBB, eligible families with children could claim the child tax credit regardless of parents' immigration status.

Households with non-citizen parents will likely be ineligible to receive the credit. This means that the nearly 2.7 million children in the U.S. who previously qualified will no longer be eligible for the credit due to their parents’ immigration status.

But for those who do qualify, the child tax credit has also been indexed for inflation starting in 2026. That will increase the credit amount every year based on inflation-adjusted numbers.

For more information, check out Kiplinger’s report, Here's How the Child Tax Credit 2025 Amount Will Increase Under Trump.

2. Trump account for kids and newborns

Trump’s megabill also introduces a new type of savings account. The “Trump Account” is designed to save annually for a child’s future educational, homeownership, and entrepreneurial needs.

While sharing some similarities with a 401(k), there are some marked differences. Namely, a Trump account:

• Allows parents, relatives, and others to contribute after-tax dollars (up to $5,000 per year) in a child’s name.
• Permits savings to grow tax-deferred until the child reaches 18.
• Gives children born between 2025 and 2028 seed money of $1,000 in each account.
• Auto-enrolls any eligible child who does not have a Trump account.

The last bullet point may be problematic if Trump's accounts are comparable to 401(k)s. About one-quarter of 401(k) accounts are forgotten, according to USA Today, amounting to $1.65 trillion in unclaimed assets across the U.S.

Since the seed money would likely come from taxpayer dollars, the auto-enrollment feature could lead to millions in tax dollars sitting idle.

However, in a poll conducted several years ago, CNBC reported that 53% of parents don't open any type of savings accounts for their children.

Trump accounts could encourage more Americans to save for their child’s future and “help produce new capitalists,” as Sen. Ted Cruz (R-Texas), who initially proposed the measure, disclosed to Semafor earlier this year.

For more information, check out Kiplinger’s report, The GOP Wants to Auto-Enroll Your Child in a 'Trump Account' for Savings.

3. ‘Big Beautiful Bill’ changes for parents

The Trump tax bill also made permanent the employer-provided paid family and medical leave (PFML) credit. Here’s a quick overview of what that means:

• Before, businesses could only take the PFML tax credit for employees who had worked at least one year for an employer. Now, employees who have worked at least six months and for at least 20 hours a week may qualify.
• Employers can continue to calculate the credit based on wages paid or, under the new law, on PFML insurance policy premiums.
• State or locally mandated paid leave now counts towards satisfying the eligibility requirements for the credit.

While the PFML tax credit is a business tax break, it is designed to encourage employers to offer paid leave to more of their employees.

Only about 27% of private industry employees have access to paid family leave through their employer, according to a recent report by Congress.gov. The expanded PFML tax credit could help more families spend time with their children or support their household during medical leave.

Other parent tax changes under the OBBB include:

• Making the federal adoption credit partially refundable, with a $5,000 maximum amount. The credit will also become inflation-adjusted.
• Permanently removing the personal and dependent exemption, which was worth $4,150 (indexed for inflation).

Before the Tax Cuts and Jobs Act (TCJA), 292.7 million people claimed personal and dependent exemptions, per the IRS. Total taxpayer savings were in the billions, so individuals could see a reduction in savings with the termination of this key tax break.

What’s still to come?

Although the OBBB has been signed into law, talks continue on Capitol Hill regarding childcare. This may lead to future changes for parents.

For instance, Sens. Katie Britt (R-Ala.) and Tim Kaine (D-Va.) are leading a bipartisan effort titled the “Child Care Availability and Affordability Act” to address current childcare cost challenges through tax code adjustments, like increasing the size and refundability of the child and dependent care tax credit (CDCTC). Some similar changes related to childcare contained in the OBBB are expected to be implemented in 2026.

While the U.S. continues to experience a shortage of affordable, accessible, and high-quality childcare options, future legislative efforts may greatly impact how parents and guardians care for their children. Stay tuned.

Read More

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That made me think: Maybe I could save even more with cheaper, alternative services for cable.

After comparison shopping, I now pay $40 monthly for mostly the same channels through the Sling app, which includes digital recording, on-demand programs and a great channel guide. And it works while traveling, except for local stations. It was half the price of YouTube TV – and DirectTV was even pricier.

After shopping, I was able to get all services, including internet, streaming services and my cellphone, for $150 per month, adding up to $100 saved monthly. Plus, I can watch programming on any device without paying rental fees for cable boxes in different rooms.

My cord-cutting savings aren't uncommon. Eighty dollars is "the minimum that I've been able to save people," says Ray Gustini, a CordSlayer cord-cutting consultant. He helps people save money by planning equipment purchases, figuring out what services they watch, and when to rotate services by sports season or series start and end dates.

He recommends the following steps to save money by cord-cutting:

1. Get a digital antenna for free services

With just a digital antenna in an urban area, you may be able to get free over-the-air channels such as FOX, CBS, ABC, NBC, and dozens to over a hundred local channels, depending on where you live. "It's not like back in the day where you'd get eight channels; there are hundreds of things you can pick up locals from a big variety of places," says Gustini.

Digital antennas cost under $50 if you install it yourself or can be purchased for as little as $50 with easy installation. A digital antenna can be "screwed into the back of your TV," says Gustini.

Just don't expect them to work well if you don't live in a densely populated area. Jason Haviland, a Cottage Street Advisors senior partner and certified financial planner, lives 50 miles from Boston. He was too far away from TV towers near the city to get free channels with a digital antenna, so he spent several hundred dollars on a physical antenna installed on his house rooftop — only for new neighborhood trees to eventually block his signal, leaving many channels pixelated.

Thus, he has to use paid apps for some channels, but his strategy is still cheaper than cable TV services. He estimates he's saved up to $250 monthly by cutting the cord.

2. Explore free services on your smart TV

If you have a smart TV, it likely comes with its own set of free programming. Samsung devices and smart TVs come preprogrammed with hundreds of channels, including networks you know. Channels currently include Movie Favorites by Lifetime, PBS Kids and MSG Sports Zone.

Other TVs have their own preprogrammed free TV, including LG Channels, Vizio WatchFree+ and Google TV Live, which is available on a variety of brands.

3. Don't pay for services you don’t use

Eliminating services you never use or rotating services for sports or seasonal series can save hundreds of dollars per year. I signed up for Sling because I was used to having cable.

But I realized I only watch one TV channel beyond what I stream with Amazon Prime and Netflix. Instead of paying for Sling, I can get an app for that channel and save $25 per year – or $300 annually.

"You can toggle stuff on and off," says Gustini. "That's a big thing, not rotating your subscriptions."

Set reminders for when the show you are watching ends to cancel your subscription. Free trial end dates also need reminders.

For sports, look at what you need to purchase to watch the games you like. "You can still get a lot of those games with a digital antenna, because you'll be getting whatever's on CBS, NBC and Fox." Then, you can supplement with an ESPN standalone or a March Madness package, he says.

For services you do use, look out for regular deals and sales, like around Black Friday or Amazon Prime Day.

Let your cord-cutting savings grow

Now that you've started making choices that save your monthly spending, you should put those savings to work.

Whether you want the safety of a high-yield savings account or to invest your money in an S&P index fund, you can easily save up over $10,000 in 10 years — and potentially over $70,000 if the investments perform well.

Let's say after cord-cutting, you're saving $75 per month. That, on its own, adds up to $9,000 over 10 years.

Now, if you take your $75 monthly savings and invest it, you could attain a total of over $11,200 or even upwards of $15,000 depending on what you do with it, thanks to growth and the power of compounding. And if you invested $75 monthly for 20 years, the base $18,000 could grow to $28,000 or even up to about $75,000, depending how you invest it and other factors.

The wide earnings difference depends on whether you invest your money in a savings account with a high interest rate (high-yield savings account) or an S&P 500 indexed fund (an investment containing stocks in the largest 500 publicly traded companies).

High-yield savings accounts have variable interest rates, so the actual growth of investing $75 per month over 10 years will vary, but you can currently find accounts with rates over 4%. They differ from, say, a certificate of deposit (CD), which might have a higher interest rate but doesn't allow for adding new investments on a monthly basis like a savings account does.

The S&P 500, meanwhile, may sound like a "boring" way to invest in the stock market, but it’s also one of the more lucrative options. Historically, the S&P 500 has returned about 10% per year, or around 6-8% after inflation.

Haviland, the Boston-area financial planner, also suggests you could invest the extra savings in Treasury bills, an investment by the U.S. government that often has higher returns than the average high-yield savings account. Like a CD, though, those have set schedules of how you can invest.

This is a good reminder of a few important personal finance facts:

1. Recurring payments add up over time, so one of the most effective ways to adjust your budget is to try to cut recurring payments, like cable bills, down.
2. On the flip side, recurring savings add up over time, and a little goes a long way, especially over longer periods of time.

Seemingly "small" decisions have major impacts on your financial life — and these savings might make you smile a little extra the next time you sit down to watch your favorite show.

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Jumbo CD rates offer some of the highest returns I've found among savings accounts. They're easy to set up, and, most importantly, they don't take years to mature, with the best option giving you money back with a significant return in one year.

So, what's the catch? Unlike regular CDs, which have lower deposit minimums, jumbo CDs require you to devote a large portion of savings to them. While some banks offer them with minimum deposits of $10,000, the norm tends to be closer to $50,000 to $100,000.

And that can be difficult to know you'll be without access to that significant chunk of money for a time. However, if you're patient, you can earn more than $4,000 in one year. I'll show you how.

This one jumbo CD earns you an excellent savings rate

If you're shopping for a risk-free savings vehicle that helps you maximize your savings quickly, you can't beat this one-year jumbo CD from Finworth, an online bank:

The minimum deposit for this account is $50,000. On its own, this could earn you $2,230 in one year. That's a fantastic return.

However, doubling your deposit to $100,000 is where you see a significant increase in your return. Doing this yields you $4,460 in total interest earned.

Sure, you'll need to tie up your money for a year. But a jumbo CD is a risk-free investment with a fixed interest rate. That means if the Federal Reserve decides to cut rates in the future, it won't impact you since your rate is locked in.

Therefore, you gain peace of mind that you'll earn a guaranteed return with no risk on your end.

How to open a jumbo CD

Jumbo CDs are easy to open. If you choose the option from Finworth, you can visit their website, sign up for an account, provide personal details and fund it through an ACH transfer.

Alternatively, you can use our Bankrate tool to shop for other options as well, if you want something with a short window of maturity:

There are a few things to consider before opening a jumbo CD. The first is that you can't access the funds until the maturity date.

You can do an early withdrawal if you need the cash, but the penalty banks impose will negate some of the earnings you receive. So make sure you're comfortable tucking it away for a bit.

On the other side, set a reminder about a week from your maturity date to determine if you want to continue on to another term, as some banks autorenew CDs.

If you choose the one-year jumbo CD from Finworth and it renews, you'll have 10 days from its maturity date to cancel the renewal.

Is now a good time for a jumbo CD?

It's a great time for you to consider it. And you might want to act soon as the winds of change could be coming.

The Fed hasn't cut rates this year. However, it's becoming clear this might not carry through the fall. While Fed Chair Jerome Powell adopts a wait-and-see approach to how tariffs impact inflation, the "dot plot" indicates the cental bank will do two quarter-point percentage cuts this year.

If the Fed does cut rates, it would lower savings rates. Thus, reducing your earning potential. That's why, as uncertainty continues to exist and rates remain high, I recommend striking while the iron is hot and you can earn more money.

The bottom line on jumbo CDs

Jumbo CDs like Finworth's can help you earn a lot of money quickly, without any risk. While they require more of an investment, the maturity dates are much quicker than some other CD options, giving you a tight window to make more money.

Moreover, given we're still unsure of how the Federal Reserve will handle rate cuts in the future, it means now is the perfect time to lock in a higher rate, while they're still here.

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Right or wrong, good or bad, millennials, or those born between 1981 and 1996, have a very different approach to saving for retirement than the generation before them.

From how they work to how they save, they’re eschewing Gen X and forging their own path.

That independence is partly a byproduct of the environment in which they came of age. It’s also shaped by the tools and technology available to them. But one thing is certain: both generations share the same worry: whether they’ll have enough money to retire comfortably.

Among Gen Xers, 63% worry they’ll outlive their retirement savings. For millennials, it’s 56%, according to research from BlackRock.

That’s where the similarities end. Beyond that, millennials approach retirement differently than Gen Xers in these surprising ways.

1. They started saving earlier

It's pretty much established by now that the sooner you start saving for retirement, the better off you’ll be when you decide to retire. And if you save in a tax-advantaged company-sponsored retirement savings plan like a 401(k), it's even better.

For Gen X, that wasn’t a given; for millennials, it was. As a result, millennials began saving earlier than their older counterparts. Add automatic 401(k) enrollment to the mix, and it’s easy to see why Gen X is playing catch-up in terms of retirement savings.

At 35 or 40, millennials are ahead of where Gen Xers were in terms of saving for retirement at the same age, says Bryan Bibbo, President and CFO of JL Smith Holistic Wealth Management.

2. They are less risk-averse

From cryptocurrency to ETFs, a lot has changed in terms of how retirement savers can invest their money, and millennials aren’t afraid to test the waters.

After all, millennials became adults during a more than ten-year bull run in the stock markets and are inclined to believe everything keeps going up, which makes them more willing to take risks.

Gen X, on the other hand, lived through the Dotcom bust and the Great Recession of 2008 and 2009, and as a result, are much more skeptical and conservative when it comes to investing.

“Millennials are willing to take a lot more risk than Generation X,” says Stephanie Temporiti, a wealth advisor at Hightower Wealth Advisors.

3. They value advice

Gen Xers are an independent group. After all, they were the latchkey kids and the ones sent out to play unsupervised until dark. They didn’t have helicopter parents managing their every move. As a result, they are more apt to go it alone instead of seeking the advice of financial advisers.

Millennials are different. “They tend to work with financial advisers at a young age compared to Gen X, who held off on that,” says Bibbo. “Gen X is a little ashamed that they are not feeling on track. Millennials say I trust you, you're the professional, get me on track.”

4. They are more tech-savvy

Millennials are the first generation to grow up with mobile devices and, by default, are more tech savvy than Gen X. That has seeped into everything, including the way they invest and save for retirement, whether it’s using robo advisors, investment apps, or online trading platforms.

They are also taking advantage of the wealth of financial information available over the internet to become more informed investors, something that wasn’t as accessible when Gen X was younger.

“Millennials don’t seem skeptical about financial tools versus some of the older Gen Xers,” says Bill Van Sant, managing director at Girard, a Univest Wealth Division.

5. They don’t want to wait to pursue happiness

Work hard and enjoy yourself when you finally retire is the mantra of many generations, but not millennials. They’ve seen what that gets you and, as a result, aren’t willing to wait to pursue their happiness, even if it's at the expense of their retirement savings.

“They want to find fulfilling work, make a good living, and enjoy their life as much as they can,” says Temporiti. “They don’t want to wait until retirement to do all the things they want to do.” Gen X doesn’t subscribe to that and tends to be a little more frugal than millennials.

The jury is still out

Without a doubt, millennials and Gen X approach retirement investing and saving differently. The jury is still out on which generation has it right. Will millennials’ penchant for risk blow up in their faces? Will Gen Xers regret their reluctance to embrace technology?

While the generations may not agree on how they get there, the important takeaway is that both recognize the value of saving for retirement.

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You wouldn’t be alone. It’s something weighing on the minds of many investors, as was highlighted in this recent Morgan Stanley at Work study. It found that 39% of employees surveyed reduced their 401(k) contributions due to the current state of the economy, while 67% reduced their overall savings rate across different products.

But that doesn’t mean you should. Reducing 401(K) contributions can cause more harm than good to your retirement savings. Read on to see how.

401(k) contribution reduction dangers

1. It limits your lifetime earnings potential

Save early and often is the mantra for many financial advisers for good reason. Due to compounding, the more you save and the longer you're invested, the greater your balance will be over time.

With compounding, interest earned on an investment is added to the principal amount, then future interest is calculated on this new, larger amount. This process happens repeatedly over a set period, often months or years, depending on the investment.

Take a 50-year-old individual with $1.24 million in her 401(K) who contributes $27,500 a year ($23,500 is the 2025 yearly limit, plus up to $7,500 in catch-up contributions for those age 50 and older). Assuming a growth rate of 5.5%, her balance will grow to $4.57 million after 20 years, says Daniel Milan, founder, managing partner and CIO at Cornerstone Financial Services.

If she reduces her contributions to $12,000 a year, her balance after 20 years will be $4.04 million, about $540,000 less. “That’s not a small number,” says Milan.

What about this: Boldin, the financial planning tool company, ran two scenarios for Kiplinger.com for a married couple aged 45 with a 10% employee contribution and a 3% match. If one spouse’s contribution were stopped, the chances of saving enough for retirement would fall by 5%, and the estate would decline in value by $2 million at longevity age.

The longer you reduce contributions, the bigger the impact. If you reduce your contributions for six months, it won’t derail your retirement savings plans as much as if you kept a lower contribution rate for years.

“If it’s short-term in nature, that doesn’t have a major effect, but if something becomes the new normal or habitual, it can have a significant effect over 10 or 20 years because it decreases compounding,” says Milan.

2. You settle for less

The phrase "old habits die hard" couldn’t be truer. Once you set something in motion, it’s hard to come back. That’s particularly true when it comes to your 401(K).

If you reduce your contribution rate, chances are that will become your new baseline, which means you’re selling yourself short. The purpose of a 401(K) plan is to pay yourself first so you can live comfortably in retirement.

“If you contribute less, you are losing that habit,” says Nancy Gates, lead educator and financial coach at Boldin. “When you get a job, you are automatically enrolled up to a 3% or 4% match. You are not even thinking about it. If you stop, you may never go back to it.”

3. Miss out on growth opportunities

Buy low and sell high is the goal of most investors, but in volatile markets, many tend to do the opposite: Sell low and buy high.

If the markets have got you spooked into considering reducing your future 401(k) contributions, think again.

History has proven that stocks that go down tend to go back up. If you reduce your contributions when stocks are in decline, that’s less money that can benefit when the markets appreciate again.

Stocks recouped losses and then some after the dot.com boom and bust, the Great Recession and COVID. Even today, markets have recovered somewhat from the steep sell-off seen earlier this spring. If you stay invested when markets are depressed, you can get more shares for your money.

4. You leave free money on the table

To reward you for saving for retirement, many companies offer a matching component with their company-sponsored 401(k)s. The employer commits to match a percentage of your contributions, typically, 3% to 4%.

If you lower your contributions below the 401(K) match, you're leaving free money on the table. Less money in your 401(k) means less money that can benefit from compounding.

If you're determined to do it, Milan says to be mindful of the match.

“At the very least, we try to draw a hard line at whatever the match is,” says Milan. “Once you go below that, even in the short term, you are giving up free money that is part of your compensation package.”

5. It could push you into a higher tax bracket

If you're on the cusp of being in a higher tax bracket, contributing less to your 401(K) might push you over the edge. The income not going into your 401(k) tax-free will count as taxable income.

Gates says that if you still want to reduce contributions, make sure you aren’t lowering it so much that you have to pay more taxes.

6. It could force you to work longer

You might plan to retire at 65 or 66, but that roadmap could veer off course if you reduce your 401(k) contributions for an extended period. It could create a retirement shortfall that will require you to work longer or change your lifestyle when you exit the workforce.

Take Milan’s example of the person who contributed $12,000 per year instead of $27,500 and ended up with more $600,000 less by the time they retired. If you have $600,000 less in your 401(k), will you still be able to live comfortably in retirement? If not, you might be forced to delay retirement for a year or two or more.

When it makes sense

Reducing your 401(k) contributions should be a last-resort lever you pull and only use in extreme cases. If you can’t pay your bills or have a lot of debt, it might prove prudent to tackle that first.

“When you are starting on a path of financial wellness, the first thing to do is make some income and pay expenses on time, every time. The next goal is to have an emergency fund,” says Gates.

“After that, the goal should be to pay off high-interest debt before saving for retirement. If you can’t pay your bills on time and have high-interest debt, pause contributions until you're at the right place.”

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That idle cash isn’t growing, and in fact, it's quietly losing value to inflation. While it may feel secure, keeping too much in checking means missing out on opportunities to earn interest, invest or pay down debt. Over time, this conservative approach could limit your financial progress and leave your money working less efficiently than it could.

Here’s a closer look at why that extra cash might be more of a drag than a cushion and smarter ways to put your money to work.

Why overfunding your checking account could be costing you

Checking accounts are designed for easy access, not for growing wealth. Most traditional checking accounts earn little to no interest, and even high-interest checking accounts come with hoops to jump through like maintaining a high average monthly balance amount.

With inflation still lingering above 3% as of early 2025, according to the Bureau of Labor Statistics, keeping large amounts of cash in a checking account means your money is actually losing value over time. Simply put: every dollar sitting idle in that account buys you less in the future.

To put this into perspective, if you keep $10,000 in a checking account that earns 0.01% interest, you’ll earn $1 after a year. That same $10,000 in a high-yield savings account at 4.5% APY? You’re looking at around $450 in interest, without lifting a finger.

Compare some of today's best rates with the tool below, powered by Bankrate:

How much should you really keep in your checking account?

While there’s no one-size-fits-all answer, a common rule of thumb is to keep enough in your checking account to cover one to two months’ worth of essential expenses, plus a small buffer (say, an extra $100 – $500) to prevent overdrafts.

So if your monthly bills and spending total around $3,000, keeping $3,000 to $6,500 in your checking account is more than enough. Anything beyond that might be better put to work elsewhere.

If you’re self-employed or have variable income, you might prefer to keep a little more on hand for peace of mind. But again, that doesn’t mean all of it needs to sit in your checking account.

Where should the extra cash go?

If you’re sitting on more than a few months’ worth of expenses in your checking account, consider these options:

1. High-Yield Savings accounts (HYSAs)

Online banks often offer APYs of 4% or more for high-yield savings accounts. These accounts are FDIC-insured, easy to open, and perfect for emergency funds or savings goals. You can transfer some of the money in your bank account to a HYSA so it can start earning more interest.

Treat this as an emergency fund or savings for another important goal. You can easily connect your personal bank account and make transfers whenever you want so you’ll still have access to the money should you need it with this option.

2. Certificates of Deposit (CDs)

If you won’t need the funds for a while, CDs can lock in a higher interest rate than savings accounts. Terms range from a few months to several years, and rates can exceed 5% depending on the term length.

Just keep in mind that most CDs have an early withdrawal penalty if you decide to withdraw the funds before the set maturity date. This penalty fee is usually a percentage of the interest you’ve earned on the CD, so it’s best to avoid early withdrawals. Some banks even offer penalty-free CDs but the interest rate may be lower or you may only have access to a shorter term.

3. Investment accounts

For longer-term goals (think five years or more), investing excess cash in a diversified portfolio can offer far greater returns than any bank account. Just make sure your emergency fund is covered first. Investing is not where you want to park money meant for your mortgage.

You can open a brokerage account, an individual retirement account (IRA), or another type of investment account depending on your needs. Consider speaking with a financial advisor to help better understand your options based on your unique situation and financial goals.

4. Pay Down High-Interest Debt

Before you stash extra cash in savings or investments, ask yourself: Are you carrying any high-interest debt? If so, paying it down could be one of the smartest and most impactful financial moves you can make.

Credit card interest rates often hover around 20% or more, which means the longer you carry a balance, the more you’re spending in interest which is basically giving your money away. By comparison, even a great investment might average 7% to 10% annually. That makes debt repayment a guaranteed return on your money.

Explore today's best CDs with the tool below, powered by Bankrate:

Why do we hold on to so much cash?

For some people, keeping a large checking balance isn’t about strategy, but security. It feels good to know your bills are covered. It feels even better to know that a payment won’t get returned if something unexpected happens.

According to a 2023 survey by Empower, nearly one-third of Americans say they feel safer and more in control when they have extra cash on hand, even if it means missing out on higher returns elsewhere.

Having more than enough money in your checking account can also stem from past event that led to emotional trauma, whether it was getting laid off before and not being able to find another job for six months, or seeing your parents struggle to pay the bills when you were a child. Perhaps, others simply fear the negative impact of a potential financial crisis that hasn’t even happened yet.

Whatever your reasons, feeling financially secure and having a clear strategy for your money can coexist.

You can keep enough in checking to feel comfortable while still moving the rest to accounts that help you grow. Automating transfers to savings or investment accounts can help ease the mental hurdle. Start small if you need to, but getting started with the necessary changes to reroute your excess checking account funds is key.

So take a look at your balance. If your checking account looks a little too padded, it might be time to put your money to work because it should be doing more than just sitting there.

Connect with a financial professional with the tool below, powered by Bankrate:

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But financial success isn’t necessarily defined by big milestones such as buying multiple homes or having a certain amount of money in a savings account.

A study published by Wealth-X found that around 68% of people with a net worth of $30 million or more are self-made — proof that wealth often comes from steady progress, not sudden windfalls.

Many smaller, less noticeable accomplishments can indicate your progress in building wealth. These seven signs indicate you’re secretly getting rich, even if you’re not aware of it.

1. You're prepared for emergencies

Financial emergencies are stressful, and many Americans can’t cover even smaller sudden financial demands. According to Empower research, nearly 37% of Americans can’t cover an emergency expense of more than $400.

Americans have a median emergency savings of $600, and 21% of Americans don’t have any emergency savings.

Building an emergency fund is a key first step toward financial security. It allows you to handle unexpected expenses without added stress or scrambling for extra cash. Financial experts recommend saving three to six months’ worth of living expenses to help weather such events as a job loss or major repairs with greater peace of mind.

2. You have financial awareness

Staying informed about your finances can help build wealth. Financial literacy, or being able to understand and manage finances, can help you make more well-informed financial decisions.

For example, if you understand how to budget, save and invest, you can take steps to manage your money and plan for long-term financial goals.

Still, navigating complex financial choices isn’t always easy. A professional can help you create a personalized strategy and stay on track as your needs evolve. Use the tool below to connect with a financial professional, powered by Bankrate.

3. You live below your means

Spending less than you earn can help set you up for long-term financial success. As your income grows, it’s tempting to upgrade your lifestyle and increase spending.

But by keeping expenses in check, you’ll have more of your paycheck available to save and invest — key steps toward building wealth. Small, consistent contributions to a high-yield savings account, retirement plan or brokerage account can compound over time and significantly grow your net worth.

Living below your means takes self-discipline, but it can lead to greater financial freedom. If you’re budgeting carefully and consistently setting money aside each month, you’re already on the right path.

4. You're focused on the long-term

If you’re targeting long-term financial goals rather than short-term gratification, you’re on your way to getting rich. Building wealth takes time, and the ability to patiently save can help you meet long-term objectives.

Others who splurge on luxury items or vacations might seem as if they’re ahead of you financially, but your long-term vision can help build lasting security and wealth.

While it might feel as if you’re missing out now, your future self will thank you for making smart, forward-thinking choices today. Staying committed to your goals — even when no one’s watching — is one of the clearest signs of financial maturity.

5. You're strategically investing

Investments are a key element of getting rich, and leveraging your investments early can help build wealth. When you invest early in life, you can take advantage of compound interest, in which you’re earning interest on interest.

For example, if you invest $1,000 and it earns 5% interest, at the end of the year, you’ll have $1,050. If that investment earns 5% during the second year, then you’ll have $1,102.50. You’ll have earned interest not only on your investment, but also on the $50 in interest that you earned during the first year.

Compound interest can grow significantly, especially when you have money invested for several decades. If you’re regularly investing and your money is earning interest, you’re building wealth.

6. You've created multiple income streams

Diversified income streams can strengthen your financial security and help grow your wealth. For example, you might have a full-time job, but you could also take on freelance work or a side hustle to generate extra income.

Adapting your home as a vacation rental or even buying a rental property can also diversify and increase your income.

Having multiple income streams not only gives you more to save and invest, but also acts as a financial safety net. If you lose your primary job or face an unexpected setback, you’re less reliant on a single paycheck. Diversifying your income can also help you reach financial goals faster and offer more flexibility in managing your time and money.

If you're looking for ways to make your money grow, compare some of today's best savings account offers with the tool below, powered by Bankrate:

7. You value financial security

Valuing financial security over the consumption of material goods is another sign you’re quietly building wealth. It shows you’re thinking long term, prioritizing stability and peace of mind over short-term indulgences.

Maybe you’ve chosen a certified pre-owned car instead of a new one, or opted for a relaxing vacation closer to home rather than an expensive trip to Europe. These decisions might not seem flashy, but they reflect a mindset focused on preserving and growing your money.

When you recognize that financial security is more rewarding than the latest trend or luxury item, you’re laying the foundation for lasting wealth — and gaining the freedom to make choices on your own terms.

The process of building wealth

Did you recognize some of these signs in your own life? Even if only a few apply, you’re already practicing strong personal finance habits, and that’s worth celebrating.

Remember, building wealth is a long-term journey. No matter where you are today, small changes can help position you for greater financial success. Developing smart money habits now can lead to increased security, flexibility and peace of mind in the years ahead.

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High-net-worth individuals (HNWIs) tend to follow a consistent set of habits that help them grow their fortunes and keep them intact for the long haul. These aren’t necessarily secrets, but they are practices that require focus, patience and intention.

Here are seven habits wealthy people swear by to create lasting financial success.

1. Pay yourself first

Paying yourself first simply means setting aside money for saving and investing before spending anything else.

Rather than saving what’s left over at the end of the month, rich individuals often automate a fixed percentage of their income or a flat amount to go straight into retirement accounts, brokerage accounts or other savings vehicles every month.

This strategy involves treating saving and investing like a non-negotiable expense, right alongside rent or mortgage payments, groceries and other necessities. By prioritizing their future, they minimize the temptation to overspend, build financial security, fund long-term goals and create opportunities for compounding growth.

2. Live below your means

Living below your means isn’t about being frugal for the sake of frugality — it’s about maintaining discipline and avoiding lifestyle inflation.

Many wealthy people adopt modest lifestyles even when they can afford to spend much more. They understand that excessive consumption erodes long-term wealth, while mindful spending creates room for investment and freedom.

This mindset often flies in the face of public perception. While the media focuses on flashy cars and luxury homes, many millionaires quietly choose used cars, modest houses and simple pleasures.

That restraint allows them to build cash reserves, take calculated investment risks and weather financial challenges without needing to rely on debt.

3. Invest regularly and early

Compounding is often referred to as the eighth wonder of the world, and the wealthy know how to use it to their advantage.

HNWIs often don’t try to time the market or chase investing fads. Instead, they prioritize consistent investing over long-term horizons. They take full advantage of retirement accounts like IRAs and 401(k)s, maximize tax-advantaged opportunities and often automate regular contributions to diversified portfolios.

Starting early is key because the earlier you invest money, the more time it has to grow. A dollar invested in your 20s can easily be worth multiples more than the same dollar invested in your 40s.

Explore some of today's best savings account options with the tool below, powered by Bankrate:

4. Diversify your income streams

Wealthy people often don’t rely on a single paycheck or investment. Instead, they diversify their income sources across a range of assets, such as real estate, business ownership, stocks, side ventures and more.

This diversification not only provides financial stability but also accelerates wealth-building. If one income source slows down or dries up, others can help maintain cash flow. Additionally, many HNWIs look for scalable income streams that grow without demanding their constant labor.

Passive income, in particular, is a key theme among the wealthy. Rental properties, dividend-paying stocks and automated online businesses are just a few tools rich people use to make their money work for them, even while they sleep.

5. Continually educate yourself about money

The wealthy tend to spend time improving their financial literacy and staying informed about markets, trends and opportunities. Whether through books, financial media or online courses, they make a point of sharpening their money skills.

Many also seek out advice from professionals, such as financial advisors, accountants and attorneys, who can help them build tax-efficient strategies and protect their assets.

Continual learning helps rich individuals make smarter decisions, avoid financial traps and adapt to changing economic environments.

6. Preserve what you build

Wealthy individuals don’t just focus on growing their money. They also make sure to protect it.

That means having the right insurance, setting up estate plans and creating legal structures like trusts or LLCs to shield assets from risk. They also consider tax strategies that preserve more of what they earn and pass on.

Asset protection may not be flashy, but it’s essential for maintaining wealth across generations. One unexpected lawsuit, medical emergency or tax misstep can derail decades of careful planning.

Wealthy people think long term, and that includes planning for the worst — even as they hope for the best.

Need help building your path to wealth? Use the tool below, powered by Bankrate, to connect with a professional:

7. Build a strong network

HNWIs tend to surround themselves with other motivated, forward-thinking people, including entrepreneurs, mentors, investors, professionals and peers who challenge and inspire them.

These networks are often more than social circles — they’re communities of opportunity where they can trade ideas and share deals with trusted connections that help them grow. In return, they build relationships rooted in trust and reciprocity.

The bottom line

You don’t have to be wealthy to act like the wealthy. By adopting the habits that help high-net-worth individuals succeed, you can take meaningful steps toward building your own lasting financial foundation.

Potential strategies you can pursue include paying yourself first, spending wisely, investing regularly, diversifying income, continually learning, preserving what you build and building a strong network. You may also discover other approaches as you better understand your financial situation and goals.

Ultimately, it's crucial to discover what you want out of your financial plan and take steps to work toward your objectives.

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The reason? Rates on CDs are still high, with many terms earning you over 4%. However, those rates might be coming down in the future if the Fed decides to cut interest rates.

And that's becoming more of a reality. CNBC conducted a survey of economists, fund managers and analysts, and 65% believe a rate cut will happen this year on account of a wobbling economy. This is up from 44% in March, so it's clear a shift is starting to happen.

If a rate cut happens, it means you only have a narrow time to lock in a higher rate of return. Take a look at how a CD ladder allows you achieve long-term financial growth, with the flexibility to pivot investments as you see fit.

How does a CD ladder work?

A CD ladder is a savings strategy where you don't put all of your eggs into one basket. You essentially open multiple CD accounts, but not at the same time.

To demonstrate, say you have $100,000 to devote to savings. You could put it all in a jumbo CD and earn 4.50% with some accounts. But what if you want to diversify?

With a CD ladder, you would instead spread your investments out, like this:

• $20,000 in a one-year CD
• $20,000 in a two-year CD
• $20,000 in a three-year CD
• $20,000 in a four-year CD
• $20,000 in a five-year CD

The goal of this approach is to stagger maturity dates. That way, you have access to some cash if you need it, while also having the flexibility to take everything earned on a CD and reinvest it to continue climbing the ladder.

The other benefit of a ladder is there's not one specific way to do it. You could start with a few CDs to see how you manage and continually add more from there. That also gives you opportunities to see where rates stand in a moment of uncertainty.

Using this Bankrate tool, you can find CDs to start this approach:

What to consider with a CD ladder

A CD ladder requires more maintenance than a normal CD. As you approach one maturity date, you'll have to decide what to do with your cash from there. And the more CDs you have, the more you'll have to do this.

Some banks and credit unions will automatically renew your CDs unless you set a plan with them. Therefore, make sure to set a reminder on your phone a few weeks before the maturity date, as it will give you ample time to research whether to keep your money in one or try another option.

Another thing to keep in mind is inflation. While you can earn a good rate of return on a five-year CD now, we also don't know how the trade wars and other policies will impact inflation moving forward. If inflation does rise enough, it would lower the purchasing power on what you earn with a CD.

On the other hand, if the Fed does cut rates sometime this year, it's vital to start your CD ladder sooner than later to take advantage of the higher rates.

Some of my top CD recommendations

Along with the Bankrate tool, here are a few CD recommendations that can help you build your ladder:

Now is an excellent time to start a CD ladder, especially if there might be rate cuts later this year. With a CD ladder, you'll be able to diversify your savings to help you reach your goals.

This approach also gives you a chance to change up CDs as you need to maximize savings. Just remember to set reminders on when each CD matures, as it gives you time to decide where to park your cash next.

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While there has been a ton of attention on the Capital One-Discover merger, the major bank has also been fighting a class action lawsuit regarding its savings account since last year. The lawsuit claims that Capital One pulled a bait and switch on savings account customers.

It advertised the 360 Savings account as its high interest savings account and later froze rates on that account at 0.3% while rates on its newer, similarly-named 360 Performance Savings account soared to a peak of 4.3% when the Federal Reserve began rapidly increasing interest rates.

As a result, the lawsuit alleges, Capital One avoided paying over $2 billion in interest to its customers between 2019 and 2025. As part of the agreement, Capital One denies any wrongdoing. Here’s what we know so far.

What are the accusations in the Capital One lawsuit?

When Capital One first launched its 360 Savings account in February 2019, it was advertised as a high interest savings account. By September of that year, the bank had removed all references to that account, stopped offering it to new customers and replaced it with information about the new 360 Performance Savings account.

The new 360 Performance Savings account opened with a 1.9% APY, while the previous 360 Savings account earned just 1% APY. The lawsuit alleges that Capital One actively deceived customers by advertising the 360 Savings account as its high interest product, but then later creating a new, higher-earning account without automatically converting the older account type or notifying existing customers.

When the pandemic hit in 2020 triggering even lower interest rates, Capital One dropped rates on the older account type to just 0.3%, while the 360 Performance Savings account earned 0.4%.

The crux of the suit is what happened after this. When the Federal Reserve began a rapid series of rate hikes in 2022, the Capital One 360 Performance Savings account saw its APY soar to 4.3%, while the older 360 Savings accounts were frozen at the 0.3% rate.

The claimants allege that Capital One avoided paying over $2 billion in interest between 2019 and 2025 as a result.

The Consumer Financial Protection Bureau (CFPB) announced in January that it was also suing Capital One over the same issue. The agency accused the bank of actively obscuring the newer, higher-earning 360 Performance Savings from existing 360 Savings accountholders.

The CFPB suit alleged that Capital One did this by:

• Giving the new account an almost identical name, along with all the same terms and conditions (aside from the interest rate)
• Replacing all references to the original 360 Savings account on its website with information about the new 360 Performance Savings account, without notifying accountholders that it was maintaining the older account type as a distinct product (and that that product would no longer be its highest-earning savings account option)
• Forbidding employees from proactively telling 360 Savings accountholders about the new 360 Performance Savings product
• Excluding existing 360 Savings accountholders from an advertising campaign about the newer account – a campaign that showcased the higher earning product to all of Capital One’s other existing customers who didn’t currently have the older savings account

By February, the Trump administration dropped the Capital One case along with dozens of others. But if the CFPB’s suit had moved forward, it would have forced Capital One to pay even more into a victims' relief fund that could help Capital One customers recoup even more of the potential earnings they missed out on between 2019 and 2025.

Who is eligible for a payout from the Capital One settlement?

The settlement will apply to both current and former customers who have or had a Capital One 360 Savings account at some point between September 18, 2019 and the date the judge approves the settlement.

How much will members of the class action lawsuit get?

The $425 million settlement will be paid out in two ways:

• $300 million will be used to pay all members of the class action lawsuit the amount of interest they would have earned if their account had been earning the same rates as the 360 Performance Savings account. The amount each member gets will be based on the length of time they held the account and what the rates were for the 360 Performance Savings account during the time that they had the older 360 Savings account.
• The remaining $125 million will go toward customers who still have a 360 Savings account. Their accounts will now earn at least double the national average rate for savings accounts, as defined by the FDIC.

The exact amount each eligible recipient will get has not been calculated yet. However, it's currently estimated that those who have already closed their 360 Savings account (or who do so before October 2, 2025) will receive a 15% larger payout than those who keep the savings account open.

For those who keep it open, the payout will be smaller, but you will also receive additional interest payments in your savings account. Whether those additional payments outweigh the estimated 15% cut to your class action settlement payout remains to be seen.

If you want to try to calculate that additional interest yourself, the formula used is available. The amount will be the approximate amount of additional interest your account would have earned during the class period (September 18, 2019 through June 16, 2025) if your account had the same interest rate as the 360 Performance Savings account.

So, calculating it yourself would involve looking back through your records to find out when you opened the account. Then, find out what the 360 Performance Savings interest rate was for each month during that class period that your account was open. Finally, calculate the difference between the interest you would have earned in the higher yield account and the interest you actually earned.

If that sounds like too much math, you'll just have to make an educated guess. If you only had the account for a couple of months during that eligible window, closing your account now and opting for the larger cash payout might make more sense. But if you've had the account for a year or more or you have a large balance in that account, it probably makes more sense to keep the account open and take the additional interest payments.

When will Capital One begin sending out payments?

The settlement is still pending court approval, which is scheduled for November 6, 2025. In the meantime, the date that payouts start going out is still to be determined. If you think you're eligible for a payout, you will automatically receive a check. There's no need to file a claim.

But, if you'd like to choose a specific payment method or update your address, go to the Capital One 360 Savings Account Litigation website to learn more. You have until October 2, 2025 to choose a payment method. If you don't choose, the default method will be a physical check sent to you by mail to your last known address.

The same applies to customers who still have an open Capital One 360 Savings account. Since you are also entitled to backpay for unpaid interest under the settlement, you'll automatically receive the additional interest in your savings account.

How to make sure you’re really getting the best rate on your savings account

Whether you’re a Capital One customer or not, one thing this case highlights is the importance of being vigilant about your finances. Savings accounts – even high yield savings accounts – have variable interest rates by nature.

So, even if the account you opened offered the best rate at the time, that same bank or its competitors may be offering an even better rate now. Here are some steps you can take to make sure you’re always earning as much as possible on your savings:

• Check the best high yield savings account offers available every few months and compare today’s best rates to what your existing account is earning. Opening a new account online takes as little as five minutes, so it’s easier than ever to move your savings around as often as needed to make sure you’re always earning the best rate.
• Stash any savings you don’t need immediate access to in a high-yield CD account. Unlike savings accounts, a CD offers a fixed rate for the entire term so you won’t see your initially high APY dwindle over the next few months or years. With terms ranging from as little as three months up to five years, you can pick a time frame that fits with your savings goals. These are great to use for short-term savings goals, like a vacation you’re planning next year or a down payment on a new car.
• Check for fees and account requirements before opening an account. Some banks have minimum balance requirements, maintenance fees or other restrictions that can result in charges that eat into your savings. Taking a slightly lower interest rate on a no-fee savings account might end up earning you more than the higher-yield account with hard-to-meet requirements.

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Whether you’ve recently received a windfall, hit a career milestone or just have strong income with relatively low expenses, it pays to be intentional with your savings strategy.

Here are four smart ways to make the most of your cash and grow your income without sacrificing your lifestyle

1. Automate Savings

The classic advice to “pay yourself first” still holds, and automation makes it effortless. By setting up recurring transfers, you can consistently grow your savings without having to think about it.

Start by scheduling automatic transfers from your checking account to your high-yield savings account on a regular basis — whether that’s weekly, monthly or timed with your paycheck. This ensures that saving becomes a habit, not an afterthought.

You can also automate retirement contributions through your employer’s 401(k) or similar plan. Most companies allow you to designate a percentage of each paycheck to go directly into your retirement account, helping you build long-term wealth with minimal effort. Some employers offer matching contributions, giving your savings an added boost.

2. Max Out Your Retirement Savings

Automating your retirement contributions is a great start, but to truly make the most of your income, be sure you’re contributing enough to unlock your full employer match.

Many employers match contributions up to a certain percentage of your salary, and not taking full advantage means leaving free money on the table.

Once you’ve hit your employer’s match, aim to max out your 401(k) contributions. For 2025, the limit is $23,500. Contributing the maximum helps reduce your taxable income now and strengthens your long-term financial security.

Beyond your 401(k), consider opening both a traditional IRA and a Roth IRA to diversify your tax advantages.

• A traditional IRA allows for pre-tax contributions, meaning you’ll pay taxes when you withdraw the money in retirement.
  
• A Roth IRA works in reverse — you contribute after-tax dollars now, but your withdrawals in retirement are tax-free.

For 2025, you can contribute up to $7,000 across all IRAs if you're under 50, or $8,000 if you're 50 or older. The ultimate goal: aim to save and invest at least 15% of your income for retirement across all accounts.

3. Tap High-Yield Savings Accounts

If you’ve checked your savings account lately and noticed the interest is barely ticking upward, you’re not alone — and you’re not stuck. One of the easiest ways to boost your passive income is by moving your emergency fund to a high-yield savings account.

High-yield savings accounts consistently offer interest rates well above the national average. While the exact rate fluctuates, these accounts typically deliver far better returns than traditional savings accounts.

Consider this: A $10,000 balance earning 5% APY will grow by more than $500 in a year. That same balance in a standard account earning the national average of 0.41% would earn just $41 over the same period.

If your cash reserve is sitting in a low-interest account, it's time to shop around. We've rounded up the best high-yield savings accounts to help you get started.

Explore today’s rates by using the savings tool below, in partnership with Bankrate.

4. Diversify Your Portfolio

To build lasting wealth, it’s essential to diversify your investments. Stocks are a strong foundation, particularly broad-based index funds that track the S&P 500, which have historically returned over 10% annually. Over time, these investments can significantly grow your net worth.

But don’t stop there. Relying solely on the stock market exposes you to volatility, especially during economic downturns. To protect and grow your wealth in all market conditions, consider diversifying across multiple asset classes.

Affluent investors often allocate a portion of their portfolios to real estate, bonds, private equity, hedge funds or private credit. These alternative assets can help smooth out returns and provide income or appreciation even when stock performance is lackluster.

The key is balance — building a portfolio that aligns with your goals, risk tolerance and timeline while ensuring no single investment type holds too much weight.

The Bottom Line

The more you save now, the more freedom you’ll have later — whether that means a comfortable retirement, a dream home or spontaneous big-ticket purchases.

By putting these strategies to work, you can make the most of your income, grow your savings more efficiently and build a future that supports the lifestyle you truly want.

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Savers who have significant sums to stash away may be able to earn a little extra interest by putting their money in “jumbo” certificates of deposit or money market deposit accounts, which have larger minimum balance requirements than standard accounts but offer higher yields.

The minimum amount required to open a jumbo account varies, but usually, you’ll need to deposit at least $25,000.

My eBanc, for example, offers an online six-month jumbo CD that recently yielded 4.5% if you have a balance of at least $50,000; otherwise, the bank’s six-month CD yields 4.35%, with a $5,000 minimum deposit.

And if you deposit at least $100,000 in My eBanc’s money market account, you get a 3.9% yield. Balances of less than $100,000 earn 3.4% (if your balance falls below $5,000, you’ll be charged a $15 monthly fee).

Justice Federal Credit Union offers a 4.21% yield on a 12-month CD if you deposit at least $100,000. (This jumbo CD is not in the table below because we assume a smaller deposit when listing those accounts.)

Otherwise, its 12-month CD yields 4.10%. Anyone can become a member of Justice FCU by joining a qualifying association.

The Federal Deposit Insurance Corporation and the National Credit Union Share Insurance Fund provide up to $250,000 in insurance per depositor against the failure of a bank or credit union.

If your combined balances in deposit accounts would exceed the limit at a single institution, you may want to spread your funds among multiple banks or credit unions.

To help make the most of your savings, we’ve compiled a list of top-yielding accounts that offer competitive interest rates.

Whether you're considering a high-yield savings account, a money market account or a jumbo CD, this table provides key details, including minimum deposit requirements, current interest rates and any notable terms or conditions.

• * Fund is waiving all or a portion of its expenses
• ? Internet only
• # Money market deposit account
• & Must be a member; to become a member, see website or call
• ‡ CD term is 36-59 months

Sources: Bankrate, DepositAccounts, Money Fund Report (iMoneyNet).

• * To earn the maximum rate, you must meet requirements such as using your debit card several times monthly and receiving electronic statements
• ^ Portion of the balance higher than the listed range earns a lower rate or no interest
• & Must be a member; to become a member, see website.

Source: DepositAccounts.

As of April 30, 2025. EE savings bonds purchased after May 1, 2005, have a fixed rate of interest. Bonds purchased before May 1, 1995, earn a minimum of 4% or a market- based rate from date of purchase. Bonds bought between May 1, 1995, and May 1, 2005, earn a market-based rate from date of purchase.

Source for Treasuries: U.S. Treasury

What if a jumbo account isn’t the right fit?

If a jumbo account doesn’t align with your financial needs, there are still plenty of ways to earn competitive interest on your savings.

High-yield savings accounts, standard certificates of deposit and money market accounts offer great alternatives with lower minimum deposit requirements.

Explore some of today’s best savings accounts with the tool below, in partnership with Bankrate, to compare current interest rates:

Are jumbo accounts the right choice for your savings?

Jumbo accounts can be a smart option for big savers who want to earn higher interest rates. Whether you choose a jumbo CD or a money market account, these accounts typically offer better yields than standard savings options.

However, they also come with higher minimum deposit requirements and, in some cases, fees if your balance drops below a certain threshold.

Before committing, compare rates, terms and insurance protections to ensure a jumbo account aligns with your financial goals and provides the best return on your savings.

Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.

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What are the essential steps? What truly matters? And what do all those unfamiliar terms signify? To help you navigate this process, I've compiled and clarified 15 estate planning terms you should understand.

Estate planning definitions and terms to know

1. Codicil: A formally executed document that amends the terms of a will so that a complete rewriting of the will is not necessary. It will either explain, modify or revoke aspects of an established document.

Purpose: Codicils are required to change/update your will after significant life changes such as births, deaths, marriages, divorces or moving out of state.

2. Conservator: An individual or a corporate fiduciary appointed by a court to care for and manage the property of an incapacitated person in the same way that a guardian cares for and manages the property of a minor.

Purpose: A conservator's primary purpose is to protect the financial and/or personal well-being of an individual who is unable to manage their own affairs due to incapacity or legal limitations.

3. The Generation-Skipping Transfer Tax (GSTT): a separate tax that is imposed in addition to the estate tax. It is applied to outright gifts and transfers in trust that exceed the GSTT exemption. These transfers, which can occur during one's lifetime or at death, are made to beneficiaries who are two or more generations younger than the donor, such as grandchildren or great-grandchildren. The tax is currently calculated at a flat rate of 40%, which is equal to the top estate and gift tax rate

Purpose: The GSTT is designed to prevent the avoidance of gift or estate tax at the skipped generational level. Some states also impose a state-level generation-skipping transfer tax.

4. Gross Estate: This estate planning term refers to the total value of an individual's property at the time of their death. It also encompasses certain assets they previously transferred, which are still subject to federal estate tax regulations.

Purpose: This comprehensive valuation is a key component in determining federal estate tax liability.

5. GSTT exemption: The GSTT exemption amount is $13.99 million per individual in 2025. The amount is currently set to revert to a $5 million baseline in 2026, and is projected to be $7 million when indexed for inflation, unless Congress acts prior to this date to extend the increased exemption.

Purpose: The exemption allows you to reduce or potentially eliminate the transfer taxes associated with gifting or passing money to grandchildren or other skip beneficiaries.

6. Heir: A person entitled to a distribution of an asset or property interest under applicable state law if you die intestate due to the absence of a will. “Heir” and “beneficiary” are not interchangeable, although they may refer to the same individual in a particular case. Anyone you chose to leave a bequest is a beneficiary, only those related by blood or law can be your heir.

Purpose: If you die without a valid will, you die intestate, and your state's intestacy laws determine how your assets are distributed, typically to close relatives. Intestate succession laws would then dictate the order in which your assets are distributed to your heirs.

7. Life estate: A life estate grants a beneficiary, also called the life tenant, the legal right to use a property for the duration of their life under state law. This represents the entirety of their interest in the property.

Purpose: Life estates provide a straightforward way to transfer property ownership to the next generation without the complexities of a will or trust. Because following the death of the life beneficiary, the title fully vests the person named in the deed or trust agreement. This person might be referred to as ‘the remainderman.’

8. Operation of law: The way some assets will pass at your death, based on state law or the ownership of the asset, rather than under the terms of your will.

Purpose: Ease and avoidance of probate; no specific steps need to be taken by the parties for the transfer to occur. These accounts or assets have a named beneficiary, such as a life insurance policy, retirement plan or a Transfer on Death (TOD) account.

9. Payable on death (POD) and Transfer on death (TOD) designations: POD and TOD are types of beneficiary designations for a financial account that will automatically pass title to the assets at death to a named individual or revocable trust outside of probate.

Purpose: POD and TOD accounts can be a simple and effective way to ensure the transfer of ownership of an account or policy to your chosen beneficiary.

10. Per Stirpes: This Latin term, meaning "per branch," describes a method of distributing property in estate planning. It follows the family tree, with descendants inheriting the share their deceased ancestor would have received if alive. Under per stirpes, each branch of the named individual's family is entitled to an equal portion of the estate.

How it works:

• If all adult children are living, each receives an equal share
• If an adult child has passed away, that adult child's share is divided equally among their children

Purpose: It simplifies planning by eliminating the need to name specific contingent beneficiaries for every possible scenario. And it ensures that each "branch" of the family receives an equal share.

12. Qualified domestic trust – A ‘QDOT’ is a marital trust created for the benefit of a non-U.S. citizen spouse containing special provisions specified by the Internal Revenue Code to qualify for the marital deduction.

Purpose: Estate planning advantages normally afforded to spouses are not available to non-citizen spouses even if they are permanent legal residents. A surviving non-citizen spouse is not entitled to an unlimited gift tax deduction or an unlimited marital deduction.

13. Remainderman: A remainderman, in property law, is someone who is entitled to inherit property in the future. This inheritance occurs after the termination of a preceding estate, most commonly a life estate. The remainderman is a third party who is not the creator or initial holder of the estate.

Purpose: Naming a remainderman ensures a clear and planned transfer of property when the life tenant passes away. This process can often bypass probate, thereby reducing associated costs and complexities.

14. Residue or residuary estate: The property remaining in an estate after payment of the estate’s debts, taxes, and expenses, and after all specific gifts of property and money have been distributed according to the will.

Purpose: The primary goal is to ensure all estate assets are identified and distributed as the deceased person wished. If a residuary clause is absent, any leftover assets will be distributed based on intestacy laws, potentially contradicting the intentions of the deceased.

15. Spendthrift provision: A clause in a trust that prevents beneficiaries from giving away their interest in the trust to others, a voluntary transfer, and also protects their interest from being claimed by their creditors through an involuntary transfer. This is often included to safeguard the trust assets from claims of the beneficiary’s creditors.

Purpose: Spendthrift clauses are frequently incorporated when a beneficiary is prone to financial mismanagement, has issues with substance abuse, or faces other challenges that could jeopardize trust funds.

Knowing is half the battle

Estate planning is the final piece of a sound financial plan. You can not only ensure your assets are distributed according to your wishes but organize them in a way to reduce friction and costs after you pass. Trusts are one instrument you can use to transfer assets to your intended beneficiary, reduce your tax burden and preserve more of your wealth.

Knowing the meaning of various legal terms and their purpose can help you better understand your estate planning needs and options. The next step is to create or update your estate plan.

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This is why Bankrate conducted a study to find the states where it's easiest to save money, and states where it's hard to store away cash.

For criteria, they used seven metrics broken down into three categories: economic conditions of the state (50 percent), interest rate for certificate of deposits and high-yield savings accounts (25 percent) and 25 percent for taxes.

States where it's easiest to save money

Here are the 10 states where residents have an easier time to save money:

What are the commonalities among these states? They have lower tax bases, as Florida, Tennessee, South Dakota and Texas don't have state income taxes. Many of these states also have lower-cost-of-living areas.

While these states may offer tax advantages and a lower cost of living, you don't have to live in one to take advantage of high-yield savings accounts.

Using this tool from Bankrate can help you find the best savings rates from online and traditional banks:

States where it's hardest to save money

On the other side of the coin, here are the 10 states making it harder for residents to save money:

These states have higher costs of living. In addition, many have higher taxes which drives up costs even more, making it tricker to save money.

If you live in one of these areas or are looking for ways to maximize savings, budgeting apps come in handy. Many are easy-to-use, some are free and they can pool all of your financial accounts into one hub, making it easier to track spending.

One of our favorites is Empower. I tried it out and liked it so much that it's my primary budgeting app now. It's free, allows you to organize personal and investing accounts into one spot, and you can receive fee-based advising services.

Other tips to save money

In addition to budgeting apps, look for savings options that outpace inflation. Traditional brick-and-mortar banks offer a friendly face and personal service, but their savings rates won't keep pace with inflation.

If you don't want to go with a high-yield savings account with an online bank, look at other options, like a certificate of deposit or a money market account.

Money market accounts are great in that you can earn a healthy rate of return, with access to your cash when you need it. Many banks and credit unions offering them give you debit card and check writing abilities, combining the best elements of a checking account with savings.

Another option is a CD. With a CD, you set money aside for a specified period of time and earn a guaranteed rate of return. Many CDs offer rates of return higher than 4%, helping you earn more money effortlessly.

Compare the best rates from Bankrate here:

With CDs, you'll want to keep your money in until the maturity date. If you try to withdraw it beforehand, the bank closes the CD and charges you a fee, negating the interest earned.

Therefore, it's only a wise solution if you feel comfortable setting money aside and forgetting about it.

The bottom line

Where you live plays a role in how much money you're able to save. The Bankrate study is helpful in that if you're planning to move soon, you could choose an area more favorable to savers.

Alternatively, you can use budgeting apps with savings vehicles with higher rates of return to ensure you maximize savings, regardless of what your zip code is.

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