Cash is still king, but for how long? Last year, the Federal Reserve initiated an aggressive interest rate–cutting cycle when inflation dropped from exceptionally high levels and fears of a recession started to emerge. But through the first six months of 2025, the Fed took a wait-and-see approach, holding interest rates steady in the range of 4.25% to 4.5%. Reason: The Fed is navigating a particularly convoluted economic and political landscape of stubborn inflation, erratic tariffs, international tensions and a surprisingly solid labor market.
Another wild card: The Federal Reserve controls only short-term interest rates. Intermediate- and longer-term rates are determined by bond investors on the open market. For the past two years, people interested in saving money have had the abnormal good fortune to earn much higher yields in short-term deposit accounts than if they tied up their money in longer-term certificates of deposit (CDs) or Treasury bonds. But that’s changing now because longer-term yields are rising as savers prepare for higher inflation and the burgeoning Federal debt.
What all this means for people looking for ways to save money: Banking expert Ken Tumin expects very modest interest rates—one or two quarter-percentage-point cuts by year-end—if inflation remains contained and economic growth and employment figures soften. That would bring interest rates down, at most, to the 3.75%-to-4% range
But with so much uncertainty, Tumin believes savers should hedge their bets, positioning themselves to do well in a variety of interest rate scenarios, ranging from much lower interest rates if the economy tanks and unemployment spikes…to the possibility of higher rates if inflation heats up.
To help you decide where to put your cash in this tricky environment, Bottom Line Personal asked Tumin for his best strategies and favorite accounts to save money, including CDs…money-market and savings accounts…and reward checking accounts.
Certificates of Deposit (CDs)
Strategy: Use a barbell approach. Depending on when you need to access your cash, buy both shorter- and longer-term CDs. Why do that when you can still get higher rates on 12-month CDs than 60-month CDs? Because interest rates are too unpredictable to make a big bet now. They could be far lower when your short-term CDs mature, so you want to lock in some of your cash at longer-term rates. Best short- and long-term FDIC-insured CDs from banks and easy-to-join credit unions…
Northern Bank Direct’s 6-month CD pays a 4.5% annual percentage yield (APY). Minimum deposit: $500…maximum: $250,000. NorthernBankDirect.com/cds
My eBanc 12-month CD pays a 4.45% APY. Minimum deposit: $50,000. MyeBanc.com
Hughes Federal Credit Union has two 17-month CDs—one with a 4.5% APY ($99,000 minimum deposit) and another with a 4.45% APY ($50,000 minimum deposit). The credit union also offers a 30-month CD paying 4.34% APY ($99,000 minimum deposit) and 4.29% APY ($50,000 minimum deposit). Membership is open to anyone who makes a $10 donation to select local community groups such as the Friends of the Pima County Public Library. HughesFCU.org
US Alliance Financial 24-month CD pays 4.35% APY. Minimum deposit: $500 minimum. USAlliance.org
Mountain America Credit Union 60-month CD with a 4.25%$ APY. Minimum deposit: $500. Membership is open to anyone who joins the American Consumer Council (free). MACU.com
Strategy: Consider an “add-on” CD as insurance against lower rates. An add-on CD gives you more flexibility than a traditional CD because you’re allowed to make deposits to the CD at the initial interest rate throughout the life of the CD. If rates fall or stay the same, you still get the same yield as the existing CD. But be careful: Add-on CDs often come with restrictions such as a maximum amount you can add on or the number of add-on deposits you can make. Best add-on CDs…
Bank5 Connect 24-month add-on CD. 3.95% APY with unlimited add-ons. Minimum deposit: $500 minimum…no maximum balance. Bank5Connect.com
Mountain America Credit Union 60-month Add-On Growth CD with a 4.25% APY. It offers unlimited add-ons with a $100,000 maximum balance. Note: You are required to make an automated monthly deposit of at least $10. MACU.com
High-Yield Savings and Money-Market Accounts
Strategy: Choose FDIC-insured online banks and credit unions with competitive rates that make it easy to sign up and fund your account in minutes. If their rates drop and you can find much better deals elsewhere, moving your money isn’t a major hassle. Best nationally available high-yield savings and money-market accounts now…
AlumniFi Credit Union’s Savings pays a 4.75% APY on balances of $100,00 or more. (4.5% on balances from $25,000 to $100,000…and 4.25% on balances less than $25,000). To join, make a $10 donation to the Desk Drawer Foundation. AlumniFi is a division of Michigan State University Federal Credit Union. AlumniFi.org
Presidential Bank’s Advantage Savings Account offers a 4.5% APY. $5,000 minimum with Advantage Checking…4% APY without Advantage Checking. Presidential.com
Elevault, an online bank, has a savings account with a 4.6% APY. No minimum balance…$250,000 maximum. (Balances over $250,000 earn no interest). Elevault is a division of Southern Bancorp. Elevault.app
Strategy: Avoid “fintechs,” even if they offer attractive savings account yields and advertise that your money is FDIC-insured. In the past, I have recommendedfinancial-technology firms—digital platforms that partner with banks and credit unions—to offer multiple FDIC-insured accounts. But there’s a gray area regarding how well your money is protected from loss at these companies. Example: Last year, Synapse Financial Technologies, a critical intermediary linking fintech companies to traditional banks, went bankrupt and thousands of customers found their funds frozen. While fintechs partner with banks that are FDIC-insured, fintechs themselves aren’t, and neither was Synapse, the party that was responsible for actually managing and transferring the money to the banks.
Rewards Checking
If you want the highest interest rates on FDIC-insured deposit accounts without having to lock up your money for a period of time, try high-yield checking accounts available at some banks and credit unions. Another advantage: APYs on these accounts tend to drop more slowly than other deposit accounts in falling-rate environments and yields even may rise a bit this year if the economy and consumer spending strengthens because banks and credit unions base their APYs on the amount of fees they can collect from debit-card purchases.
Caveats: There are maximum deposits that qualify for the highest rates, typically $25,000. Also, to qualify for these high yields as well as reimbursement of out-of-network ATM fees, you must meet strict monthly minimum requirements that typically include making 10 to 15 debit-card transactions…paying at least one bill online…signing up for paperless statements…and/or having at least one recurring direct deposit.
Strategy: Look for yields of 5.25% or higher. You need that high of a rate to make it worthwhile to meet all the monthly requirements. Best high-yield rewards-checking accounts…
Credit Union of New Jersey Kasasa Cash Checking offers a 6% APY on balances of $25,000 or less (0.75% on amounts over that). No minimum balance is required to earn rewards. If monthly qualifications are not met, 0.01% APY on all balances and no ATM-fee reimbursement. Join by donating $5 to the Credit Union of New Jersey Foundation. CUNJ.com
Andrews Federal Credit Union Kasasa Cash Checking has a 5.5% APY on balances of $25,000 or less (0.50% APY on amounts over that). No minimum balance is required to earn rewards. If monthly qualifications are not met, 0.05% APY on all balances and no ATM fee reimbursement. Membership is open to anyone who joins the American Consumer Council (Free). AndrewsFCU.org
FitnessBank Elite Checking offers a 5.25% APY up to $25,000 (0.25% APY on amounts over that). Important: This bank has an unusual exercise requirement. To qualify for the high APY, you need to use the FitnessBank step tracker app and record an average of 10,000 steps per day (7,500 steps for those 65 and older). You also must make 15 debit-card purchases per statement period. If requirements are not met, you earn 0.10% APY on all balances. FitnessBank.fit
Bottom Line Personal interviewed Ken Tumin, founder of DepositAccounts.com (now part of LendingTree), which monitors interest rates and various developments at about 15,000 banks and credit unions.
