:max_bytes(150000):strip_icc()/MON-nensuria-3a0751d2eb60468b80d29c2bc7553745.jpg?w=1024&resize=1024,1024&ssl=1 "Inflation’s Up—Make Sure Your Money Isn’t Quietly Shrinking")
Key Takeaways
- Inflation ticked up in June to 2.7%, according to the latest monthly inflation report released last week.
- That means savings earning less than 2.7% is losing value every day.
- Luckily, there’s an easy fix: Move money into a top high-yield savings account that pays more than the inflation rate. Many options offer well over 4%—some even 5% APY.
- Since interest rates are expected to decline later this year and next, stashing a chunk of savings in one of today’s top CDs is also smart, letting you lock in a strong return for months or even years.
The full article continues below these offers from our partners.
How Inflation Eats Away at Your Savings
Inflation is rising again—and if your savings isn’t earning enough, your money may be losing value without you realizing it. The latest Consumer Price Index (CPI) report, released last week, shows that inflation ticked up to 2.7% in June, compared to 2.4% in May. That increase is a reminder that even small shifts in inflation can quietly erode your purchasing power if your bank’s interest rate isn’t keeping up.
That’s because inflation doesn’t just raise prices at the store—it also reduces what your savings can buy in the future. Consider that the national average savings account rate among FDIC-insured banks is just 0.38%, and big banks like Chase and Bank of America pay a near-zero 0.01%. That means many Americans are steadily losing meaningful buying power every month.
For instance, if inflation averages 2.5% and you’re earning just 1% on your banked cash, you’re effectively losing 1.5% a year. Fortunately, you don’t have to settle for that—because it’s incredibly easy to take control and earn more than the inflation rate with a smarter savings strategy.
Make Every Dollar Count
Even a modest savings balance deserves to grow—not shrink. It’s worth making sure your money keeps up with inflation, whatever amount you have saved.
Easy Ways to Beat Inflation With Your Savings
The simplest way to earn a solid return on your cash is to put it in a top high-yield savings account. This lets you grow your money while still keeping full access to it in case you need it on short notice.
It’s also a lucky time for savers: Today’s best high-yield savings rates remain near historic highs. Nearly 20 nationwide accounts are currently offering 4.30% or more—and some as high as 5.00% APY. In the chart below, you can see how these top rates have consistently outpaced inflation for more than two years.
Good news you can use
The top high-yield savings account rate has eclipsed inflation by 1.5 to 2 percentage points for 28 straight months.
Remember, even if you’re earning far more than the national average of 0.38%—say, 2.00% APY—you’re still falling short of the current 2.7% inflation rate and losing purchasing power. So it’s worth making the effort to move your cash into one of today’s top accounts that not only keeps up with inflation but leaves you with real earnings on top.
To earn one of these inflation-beating rates, you’ll likely need to look beyond your primary bank, as online banks and credit unions often pay the highest returns. Fortunately, we make it easy to find the best options by ranking the top-paying savings accounts every business day.
All Federally Insured Institutions Are Equally Safe
Your deposits at any FDIC bank or NCUA credit union are federally insured, meaning you’re protected by the U.S. government in the unlikely case that the institution fails. Not only that, but the coverage is identical—deposits are insured up to $250,000, per person and per institution—no matter the size of the bank or credit union.
Put a Chunk of Savings in a CD to Lock In a Higher Return
Another smart way to stay ahead of inflation is to place one bucket of your savings into a certificate of deposit (CD). While CDs require you to lock up your money for a set term—usually a few months to several years—they guarantee their return for the entire period. If U.S. interest rates decline, as many expect, savings account rates will fall—but any CD rate you’ve already locked in will stay put until maturity.
That’s especially valuable now, as the Federal Reserve is expected to lower interest rates later this year, with additional cuts possible in 2026. So while it’s smart to keep some cash easily accessible in a high-yield savings account, you might also consider putting a chunk into a CD to extend how long you can earn today’s elevated rates.
Right now, the top nationwide CD pays 4.60% on a 19-month term. Another dozen options offer 4.50% or better on terms ranging from 3 months to nearly 2 years. And if you’re comfortable locking in longer, you can secure a guaranteed return of 4.28% to 4.40% for 3 to 5 years.
CDs Are Easy to Hold at Another Bank
Because CDs are “park it and forget it” accounts—with no transactions to manage until maturity—they’re ideal for holding at a bank or credit union where you don’t already have accounts. So don’t limit your CD shopping to your current institution. Instead, look for one of today’s top rates in a term that matches your timeline.
Daily Rankings of the Best CDs and Savings Accounts
We update these rankings every business day to give you the best deposit rates available:
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that’s below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
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