Make these 4 moves with your savings account before 2025

On By Online Niel

See that in the distance? It is 2025 that is coming to meet us. You probably have a to-do list as long as your arm, so excuse me for adding to it — but now is a great time to evaluate your savings account and the cash it holds.

Here are four ways to make sure your account of savings is ready for 2025.

1. Get the best price

This is really paramount as we are in a period of falling rates. The Federal Reserve, America’s central bank, sets monetary policy for the country and influences consumption rates by raising or lowering the federal funds rate, which is the benchmark interest rate. We’ve seen cuts in September and November, and another one could be on the horizon this month.

The Fed raised this rate several times between 2022 and 2023 in an attempt to control high inflation, and it seems to have worked. We went from a peak of 9.1% inflation in June 2022 to 2.6% in the latest CPI report (for October 2024). A positive side effect of higher inflation has been the resulting higher rates on bank deposit accounts — but all good things must come to an end.

Our picks for the best high-yield savings accounts of 2024

3.90%


Price information

Circle the letter I in it.

Annual percentage yield of 3.90% starting December 8, 2024. Terms apply.

$0

3.80%


Price information

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Check the Capital One website for the most up-to-date rates. Advertised Annual Percentage Yield (APY) is variable and accurate as of December 6, 2024. Rates may change at any time before or after account opening.

$0

4.46%


Price information

Circle the letter I in it.

Annual Percentage Yield (APY) is accurate as of November 7, 2024 and is subject to change at the Bank’s discretion. Check the product website for the latest APY rate. The minimum deposit required to open an account is $500 and a minimum balance of $0.01 is required to earn the advertised APY.

$500 to open, $0.01 max APY

That’s not to say that savings accounts aren’t still worth it now, because you’ll always need money in savings for emergencies and shorter-term goals. But now is a crucial time to make sure you get the best rate.

Many of our favorite High Yield Savings Accounts (HYSAs) still pay around 4% APY, so click here to explore your account options if your savings only earned you pennies (or less) in 2024.

2. Reassess your emergency fund

Another (less happy) side effect of this higher inflation was rising prices that remained high. As much as we’d like lower inflation to mean lower prices, it doesn’t — it simply means that the rate of growth has slowed. So if you’re paying more for groceries and utility bills now, chances are good that your spending will. monthly to have increased.

So before 2025, sit down with your bank and credit card statements and compare your regular spending to your budget. and see where you’re paying more — and by how much. You can use these updated numbers to determine if your emergency fund is still sufficient.

If you have an emergency fund, you are indeed lucky. Do yourself a favor before 2025 and make sure you have enough to cover three to six months of expenses at that new higher monthly number. If not, prioritize freeing up more cash to add to your fund. urgently to get there in 2025 — you won’t regret it.

3. Make sure you are not overfunded

Maybe you have the opposite problem — too much in savings (it’s a good problem to have!). If your assessment of your emergency fund and any short-term savings needs shows that you have more money than you need right now, you could make more money by investing.

The S&P 500 has returned an average of 10% annually to investors over the past few decades. If you have money you don’t plan to use for five or 10 years (or longer — retirement, perhaps?), consider investing it.

We’ve compiled a list of the best stock brokers, and they offer low commissions, great mobile and desktop investment platforms, and in-depth research to make sure your money keeps growing. Do you want to invest for retirement? Check out our favorite Individual Retirement Account (IRA) brokers here.

4. Set some savings goals

I bet you thought this list was just going to be boring math and disaster planning. You’re wrong! I’m a big believer in saving for specific goals, and that includes fun ones like an upcoming vacation, a home remodeling project, or even buying a new TV. Having goals for your money helps you get in the right headspace to save.

My High Yield Savings Account offers buckets — separate sub-accounts within the main account. This makes it very easy to set goals for different expenses and channel money towards them. I recommend going for a HYSA with savings buckets if that sounds good to you.

Ready or not, here comes 2025. For the best chance of financial comfort and success in the new year, take a moment to go through this list with your own savings account — Happy New Year!