In 2020, the annual percentage yield (APY) has fallen twice so far.
It has to do with the Federal Reserve.
What Is a High-Yield Savings Account?
(Thats whatinvesting is for.)
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When that rate goes up, the amount of money you earn in interest increases.
The opposite is also true so when the rates fall, you earn less.
Since March 15, 2020, the rate has been 0.00%-0.25%.
A year ago, it was at about 2.25%.
In peoples minds, doing something safe meant earning two and a half percent, he says.
And now that safety means earning a lot less.
Did you know?
Low rates are good news for borrowers, bad news for savers.
In times of economic prosperity, rates go up.
So the Fed raises rates to discourage spending.
The rates will go up again the question is when.
Are High-Yield Savings Accounts Still Worth It?
So you dont risk losing your money.
Youre not seeing huge differences in rates, Barnett says.
Everything is under 1%.
Its just not real.
Be aware that theres rarely something called a free lunch out there, Barnett warns.
People are worried about the economy.
People are worried about their jobs.
The savings rate has definitely picked up in the last six months, Barnett says.
We dont want people to stop saving.
I would encourage most people to save as much as they can to reach their goals.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
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