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They say the only sure things in life are death and taxes, but lately it feels like you can add "rising interest rates" to that list. In the United States, interest rates have been increasing since 2022, and the Federal Reserve expects this trend to continue, according to CNBC.
While interest rate increases can certainly be a challenge for borrowers in general, they can also be an opportunity to grow your money. From shifting investments to putting your cash to work, it's time for you to make the most of today's high rates.
Here are four ways you can use rising interest rates to your advantage:
Open a high-yield checking account
Chartway Credit Union offers a High-Yield Checking account with an annual percentage rate (APR) of up to 4%. This is a much higher dividend compared to traditional checking accounts and comes with added conveniences such as Online & Mobile Banking, Bill Pay, no-fee ATM and Direct Teller access, Overdraft Protection, and more.
Open a high-yield savings account
When rates are high, you can't let your checking account have all the fun. High-yield savings accounts are a smart, zero-risk way to grow your short-term savings, such as your emergency fund or vacation savings.
Invest in certificates
To benefit from rising interest rates, you might consider a certificate ladder where you divide the total amount you have into equal parts and invest in multiple certificates with different maturity dates and dividend rates. As each certificate matures, you'll reinvest those funds in another certificate with a term matching your longest. Your certificate ladder will offer steady growth, more flexibility, and quicker access to funds when compared to putting your money in one certificate.
Pay off or refinance variable interest rates
If you took advantage of low-interest rates in the past and have a variable-interest loan, you may have noticed an increase in your monthly payments. To avoid future payment increases, it may be wise to refinance your variable-interest loans to fixed rates. While interest rates are not as low as they were a year ago, locking in today's rate can ensure stable payments in the future. And if rates happen to drop, you can always refinance to lower your rate.
With a little effort and a good strategy, you can take advantage of today's high interest rates to make your money work for you – and our Chartway team is here to help! For more information or to open a high-yield checking account, call or visit Chartway Credit Union.
