Opening These Two Savings Accounts At The Same Time Has One Major Benefit

While the Fed cut interest rates in September, questions still remain about what could be a turbulent American investment future. While long-term rates went down, mortgage rates stayed unprecedentedly high, meaning a forecasted 2025 housing boom may not come to pass before the end of the year. Given this fact and the turbulent nature of the stock market, many Americans may need to have more cash on-hand. This is particularly true in an environment where the cost of living is growing while the average income in the United States is staying relatively stagnant.

Unlike the long-term horizon line of investment in ETFs and other market assets, putting your money into two separate accounts can allow you to have access to liquid capital without needing to sell. By leveraging two separate bank accounts, one may not even need to trick themselves into saving. Americans can achieve this by combining the long-term power of a CD account with the accessibility of a high-yield savings account (HSA).

CD accounts are unique, as they offer guaranteed returns until maturity, with one important catch. Money in a CD is practically untouchable, meaning if you try to withdraw from the account, you will be subject to an early withdrawal fine. Currently, the best terms for a CD are close to 5%, with a time frame landing anywhere from 3 to 13 months. It is important to note that these rates are at a historic high, so locking them in soon is lucrative. While many banks have similar annual percentage yield (APY), the Gainbridge FastBreak Account has a 5.25% annuity with a three-year term.

One of the most inflation-proof and liquid ways to protect your earnings while generating a consistent return is by using a high-yield savings account. While there are some HSAs with APYs as high as 10%, they often come with several hoops you must jump through to not only keep your rate but also avoid fines. With this being said, many national banks offer HSA accounts, often without requiring any minimum investment. The APY on these accounts range from 3.4% to 4.5%. Importantly, those looking to open an account should take factors like initial investment, minimum maintenance, the lowest amount you need to put into the account monthly, and insurance on your investment into consideration. One particularly good option is SoFi's Checking and Savings Account, offering a 4.5% APY with no initial investment and is FDIC-insured.