The Federal Reserve’s forecast indicates a slower pace of interest rate cuts, which could discourage those in debt while benefiting savers with high-yield cash accounts. Experts suggest that returns on cash holdings will correlate with the Fed’s rates, making 2025 potentially favorable for savers. Although higher rates increase borrowing costs, they also help build savings. High-yield savings accounts offering 4% to 5% rates are more common now compared to 0.5% in 2020-2021. However, savers should ensure their banks are FDIC-insured and consider liquidity and interest rate fluctuations when choosing between high-yield accounts and CDs.
