Should you open a high-yield savings account with inflation rising again? Here’s what experts think.

According to the latest Consumer Price Index (CPI) report from the Bureau of Labor Statistics, inflation rose slightly in January 2025, bringing it to its highest point since June 2024. 

For many consumers, seeing inflation rise brings back fears of the high inflation from just a couple of years ago, which has undoubtedly impacted families’ budgets. And while there’s not much you can do on an individual level to combat inflation, there are things you can do to minimize its impact on your personal finances, including by using a high-yield savings account.

While rates are slightly lower than they were throughout the past few years, high-yield savings account rates can still help mitigate — and, in some cases, outpace — inflation. 

We spoke with three financial experts to learn the importance of a high-yield savings account during high inflation, what we can expect for rates moving forward, and when alternatives may be more beneficial.

See how much more you could be earning on your money with a high-yield savings account here.

Should you open a high-yield savings account with inflation rising again?

There’s no doubt that when inflation rises, American families feel it in their budgets. However, inflation can also impact other areas of your personal finances, from the rate you can get on a mortgage to how much you can earn in your savings account.

“Inflation and interest rates are closely connected,” says Sara Kalsman, CFP and Senior Financial Planner at Betterment, a financial services company. “When inflation rises, central banks, like the Federal Reserve, often increase interest rates or keep rates at higher levels to manage the economy’s money supply and limit further inflation.”

On the other hand, when inflation falls, the Fed is more likely to lower interest rates, which helps spur economic activity.

These increased savings rates are a silver lining of inflation. You may not be able to purchase your necessities for the same price you could a year or two ago, but the higher rates on your savings account can help minimize some of those losses.

“High-yield savings accounts provide higher interest rates than traditional ones, helping mitigate some of the purchasing power loss caused by inflation,” says Kalsman. “Although the interest earned may not keep pace with inflation over time, high-yield savings accounts offer a safe and liquid option for short-term savings and emergency funds.”

Get started with a high-yield savings account online now.

Will interest rates increase again?

In mid and late-2024, experts were predicting several interest rate cuts throughout 2025. However, an unexpected uptick in inflation has stalled those plans. At the Federal Reserve’s latest meeting in January 2025, it decided to maintain current rates until it can see more clearly the impact that current economic policies will have on inflation.

“The fed funds rate is still relatively high following the high inflation we saw over the past few years,” says Sarah Maitre, a certified financial analyst, financial planner, and the founder of Camriel Advisors. “While inflation was expected to cool, the threat of tariffs has caused the opposite to happen as tariffs tend to be inflationary. For everyday consumers, this means you’re likely to see higher prices at the grocery store and elsewhere.”

This means your high-yield savings account rates are likely to remain stable, at least for the time being. In fact, many of the top high-yield savings accounts are significantly outpacing inflation right now, giving consumers the chance to get ahead.

How to find the best high-yield savings account

Consumers have many options for high-yield savings accounts, but that also means more difficulty in choosing the right one for your situation.

The simplest place to start is by comparing the rates offered on each account. Generally speaking, the bank with the highest APY will offer the best return on your savings. However, since rates can fluctuate over time — and you likely don’t want to switch savings accounts every time a new bank has the highest rate — it’s important to consider other factors, too.

You should also consider minimum deposit and balance requirements, account fees, deposit and withdrawal limits, mobile banking capabilities, and the presence of extra features, like budgeting tools or savings buckets.

When a high-yield savings account isn’t the right choice

High-yield savings accounts have plenty of perks, from their high interest rates to their FDIC insurance, which protects you from financial losses. However, experts generally agree they aren’t right for every situation.

“Long-term goals like saving for retirement typically wouldn’t offer high enough returns to beat inflation and other investment vehicles like 401(k) or Roth IRA accounts can be a more efficient way to pursue your financial goals,” says Frank Lietke, the Executive Director and President of Ally Invest Securities at Ally Bank. “Always consider your own personal financial goals to figure out which approach and accounts best fit your needs.”

As a general rule of thumb, a high-yield savings account is a good place to park your emergency fund and short-term savings, but it may be worth exploring other options for medium- and long-term savings goals.

The bottom line

No matter what’s happening with inflation, a high-yield savings account can offer you a higher return than most traditional savings accounts. However, they’re especially attractive as inflation rises since your increased savings returns can help offset some of your increased costs. Of course, it’s important to remember that a high-yield savings account is just one tool in your financial toolbox. Make sure you’re using it alongside other tools, from your budgeting app to your investment accounts.

Learn more about your high-yield savings account options here.

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Stephen Collopy

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