This post may contain affiliate links which may compensate us based on your interaction. Please read the disclosures for more information.
Interest rate cuts may not be so far off. Read on for some key moves to make before that happens. [[{“value”:”
Image source: Getty Images
Cooling inflation is setting the stage for the Federal Reserve to cut interest rates after a series of hikes that began in 2022 and lasted well into 2023. At its last few meetings, the Fed held interest rates steady. And while the central bank is not expected to cut interest rates at its upcoming March meeting, the Fed has signaled that interest rate cuts are likely in store for the latter part of 2024.
Interest rate cuts could be a great thing for consumers looking to borrow money. Right now, loans are expensive because rates are still elevated. But once they start to come down, signing a loan might be more financially feasible.
But while it could still be a few months until the Fed is ready to cut interest rates, that doesn’t mean that you, as a consumer, have to just sit on the sidelines and wait things out. Here are a few key moves to consider making now, while interest rates are still elevated.
1. Lock in a long-term CD
The Fed’s interest rate hikes haven’t only been negative news for consumers. Higher interest rates have made CDs more appealing.
But once the Fed starts to lower interest rates, CD rates could start to follow suit. So now’s actually a good time to not only lock in a CD in general, but to lock in a longer-term CD.
The CD rates that become available three, four, or five years down the line might pale in comparison to the rates savers can snag today. So if you’re saving for a far-off goal, a 36-, 48-, or 60-month CD might be a good bet.
2. Open a high-yield savings account
Just as CDs are paying more generously these days, so too are savings accounts. So if you haven’t yet made the move from a brick-and-mortar savings account to a high-yield one online, now’s a good time to take that leap. You might snag a much higher interest rate on your money in the process.
Of course, this doesn’t mean you need to completely cut ties with your current bank. There can be benefits to maintaining a checking account at a local bank, like access to different services and face-to-face interactions with bank employees. But you’ll often find the best savings account rates at online banks, so you might as well open an account while rates are still high.
3. Boost your credit score
Once the Fed lowers interest rates, you may want to jump on the opportunity to put a loan in place. Now’s a good time to boost your credit score. Doing so might make it so you’re not only able to qualify for a loan, but also, snag a competitive interest rate on one.
You can boost your credit score in a number of ways. Start by paying your bills on time and checking your credit report for errors. It’ll also help to pay off some existing credit card debt if you’re able to. And that’s actually an important thing to do at a time when interest rates are still high.
Interest rate cuts could be here before we know it. Make these moves before that happens so your personal finances will benefit.
Alert: our top-rated cash back card now has 0% intro APR until 2025
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a lengthy 0% intro APR period, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers.
The Ascent does not cover all offers on the market. Editorial content from The Ascent is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.
“}]] Read More
