School is back in session, families are back from vacation and the official end of summer is just days away. With a regular routine back in play for millions of Americans, September could also be a smart time to re-evaluate your personal financial situation.
With stubborn inflation still a concern (it ticked up twice over the summer) and interest rates at a 22-year high with no immediate relief in sight, finances are top of mind for many people. Fortunately, you can still take some steps to help boost your bottom line. Like most financial decisions, however, timing is key, so you’ll want to consider making some or all of the below money moves this month. Begin by exploring your savings account options here and earn more interest now.
3 smart money moves to make in September
Here are three smart things you can do this month to boost your finances.
Open a CD
After years of low returns, certificate of deposit accounts (CDs) are offering exponentially more interest than they had been. And rates on many of these accounts are even higher in September than they were just a few months ago. In fact, if you shop around and consider using an online bank, you may be able to find a CD with an APY of 5.5% or greater.
The CD interest rate forecast past this year and into 2024, however, is uncertain. And many experts think rates on this type of account may have already peaked. So, it’s worth opening now to take advantage. Remember, rates on CDs are locked, so if rates drop in the months to come, you’ll still be locked in at the high rate from September 2023.
Open a high-yield savings account
High-yield savings accounts are also in the spotlight currently, with rates on these accounts many times higher than they had been — and multiple times better than inflation. While not as great as the very highest CD rates, rates on high-yield savings accounts can easily be secured in the 4.5% to 5% range today. Compared to the minimal 0.45%savers are earning with regular savings accounts, you’re essentially losing money by not making a deposit into a high-yield savings account now.
That said, rates on these accounts, unlike CDs, are variable. So if the rate environment changes in the next few months and rates come down, the interest-earning capability you’ll have with a high-yield savings account will follow with it. Act accordingly. Get started with a high-yield savings account in September and start earning more interest now.
Lock in a mortgage rate
The mortgage rate environment isn’t particularly favorable for most homebuyers currently. Decades-high interest ratesand limited inventory have left many on the sidelines. But it can get worse, with Federal Reserve chairman Jerome Powell already hinting at additional interest rate hikes to come.
With this context, buyers may want to lock in a mortgage rate now, in September, instead of having to deal with an even higher rate later in the fall and into 2024. While a 7% interest rate on a 30-year mortgage is no one’s interpretation of a bargain, it could prove to be a “low” option when compared to the 8% or higher that could be on the horizon. Plus, buyers could always refinance to a lower rate when possible.
The bottom line
Whether it’s an inflationary economy, a rock-solid one or somewhere in between, there are always smart financial moves to make. These strategies can both boost your earnings and protect the money you already have. In September 2023, three of these money moves involve opening a CD and a high-yield savings account to take advantage of the elevated interest-earning potential. But homebuyers should also take action. By locking in what’s perceived to be a high interest rate now, they could be in an envious position by the time the Federal Reserve inevitably raises rates yet again.