To stave off inflation, the Federal Reserve raised benchmark interest rates by three quarters of a percentage point in June and again in July. The June increase represented the largest interest rate hike since 1994.

With interest rates increasing, the outlook for savers is accelerating. What are the best savings options for someone looking to protect the assets in a rising rate environment? 

Flexible Solutions Focused on Growth

Placing your money into a high-yield savings vehicle is a great way to grow your dollars. Here are a few great options:

  1. Money Market accounts generally have higher interest rates than traditional savings accounts and offer easy access to your funds.  For example, CrossFirst's high interest money market is a variable rate account, meaning that as interest rates rise, the rate on your account may rise as well.
  2. Certificates of Deposit (CD) accounts generally pay a higher interest rate than a money market in exchange for agreeing to keep your money in the account for a specific amount of time. There is also generally a minimum investment required and the interest may be based on the amount and timeframe invested.
  3. A Bump Rate CD is similar to a regular CD except that it gives you a one-time option to “bump up” your interest rate if rates increase. This is a particularly great option in a rising interest rate environment. Consider this example:
    • You invest $50,000 in an 18-month CD with a 2.50% APY*. In this instance, you will have $51,886 at the end of the CD term.
    • You invest the same $50,000 in an 18-month CD with the option to ‘bump’. After a 6 month review you determine that interest rates have increased from 2.50% to 3.00% and you want to exercise your one-time option to increase the rate. After 18 months (from the original investment date) you will have $52,139, an increase of approximately $253.

These are three great savings options to consider in a rising rate environment. Don't wait until interest rates have climaxed to start accelerating your savings. The key is to work with a banker who gets to know you and understands your goals so that they can recommend the best solutions for your specific situation. Give us a call today to have a conversation about your unique needs.

CrossFirst Bank offers extraordinary rates to accelerate your savings. From savings accounts to checking accounts, we understand that everyone has unique opportunities and challenges. What’s also unique is our approach. We know our clients and provide extraordinary service every chance we get. We are here to serve in extraordinary ways!

*Annual Percentage Yield