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Writer's pictureDavid Peters

Navigating Falling Interest Rates: What to Expect and How to Save

Updated: Oct 17

In the past few months, interest rates on savings accounts gradually dropped, especially after the Federal Reserve cut rates by 50 basis points back in September. Many of you are asking, "Will this trend continue?" and "Should I still open a high-yield savings account (HYSA)?" Here’s what you need to know to make intelligent decisions in today’s economic climate.


Will Savings Rates Continue to Fall?


Yes, it’s very likely. When the Fed lowers interest rates, it usually leads to a reduction in savings rates and a drop in the interest rates on loans. This is part of a broader effort to stimulate the economy by making borrowing more affordable, but it also means your savings might not grow as quickly. We’ve already seen this trend play out since the Fed’s rate cut in September, and I believe we’ll likely see another cut before the year ends.


How Many More Rate Cuts Can We Expect?


We’re seeing enough signs of slowing inflation that the Fed will likely implement at least one more rate cut before the year ends. However, I’d expect the next cut to be more modest—perhaps around 0.25%—compared to the larger 0.5% cut we saw previously. The Fed aims to strike a balance between stimulating the economy and keeping inflation under control. While inflation is easing, the Fed is likely to tread cautiously, so I believe any further cuts will be more conservative.


Should You Open a High-Yield Savings Account (HYSA) Now?


Despite falling rates, high-yield savings accounts (HYSAs) can still be a smart option if you're looking for a safe place to store your money. HYSAs offer low volatility and high liquidity, meaning you can access your funds quickly and easily without worrying about market fluctuations. If you’re someone who values stability and prefers to avoid taking on extra risk, an HYSA could still be a good fit for you.


That being said, there are other investment options out there right now that could offer higher returns—but those typically come with more risk. For example, stocks or bonds may provide better long-term growth but expose you to market volatility. Those options could be worth exploring if you’re comfortable with that risk. However, if safety and easy access to your money are your priorities, a HYSA remains a reliable choice.


Final Thoughts


As we head toward the end of the year, it’s essential to keep an eye on the Fed’s actions and how they affect interest rates. While savings rates may not be as high as they once were, there are still ways to make your money work for you—whether through a HYSA or other investment avenues. The key is to balance your need for liquidity and security with your long-term financial goals.


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About the Author:

David Peters, CPA, CFP, ChFC, CLU, CPCU, CGMA, is the Founder and Owner of Peters Professional Education (petersprofessionaleducation.com) and Peters Tax Preparation & Consulting, PC. David Peters is also registered with the U.S. Securities and Exchange Commission (SEC) as an Investment Advisor Representative (IAR) with Peters Financial LLC. He regularly teaches courses in accounting, finance, insurance, financial planning, and ethics throughout the United States, and regularly contributes regularly to various professional publications, including NCACPA’s Interim Report, SCACPA’s CPA Report, and VSCPA’s Disclosures.


Required Disclosure:

The content presented above is for informational purposes only, is general in nature, and is not intended to and should not be relied upon or construed as financial, investment, or estate planning advice. This does not constitute an offer to sell or a solicitation to buy any security, investment or planning product. Past performance is not indicative of future results. All investments involve risk, including the possible loss of principal. Please consult with a financial advisor to assess your individual situation.


Financial and investment advisory services offered through Peters Financial LLC. Brokerage and custodial services offered through Charles Schwab Co. Inc., member FINRA and SIPC. Peters Financial LLC and Charles Schwab Co. Inc. are not affiliated. David Peters also offers tax services through Peters Tax Preparation & Consulting, PC. Peters Tax Preparation & Consulting, PC is not affiliated with Peters Financial LLC and clients or prospective clients are never obligated to use Peters Tax Preparation & Consulting, PC. as part of any financial planning or investment management services offered by Peters Financial LLC.




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