Forbes - Beating inflation

Your Weekly Advisor Update

A Note From Natalie:

The battle against inflation continues as the Federal Reserve raised its key interest rate by one quarter of a percentage point last Wednesday. This means credit card debt and home equity lines of credit are about to get even more expensive.

At the same time, most banks are paying little interest on savings accounts. Consider that the national average savings interest rate is a very disappointing 0.39%. This has caused many folks to look outside of the big bank sphere for places to park their cash and earn more interest. 

Enter high-yield savings accounts. More financial institutions are debuting high-interest rates to draw customers away from lackluster returns. Last month, it was Apple card holders and this month it's Wealthfront. More details on that below. 

Let me know what consumer finance topics are on your mind. Buying a house? Saving for retirement? Paying off credit card debt? Reply directly to this email with your thoughts and questions.

Have a beautiful day!

Very best,

Natalie

Natalie Campisi

Senior Staff Writer

Consumer Finance

Editorial Note: We earn a commission from partner links on Forbes Advisor. Commissions do not affect our editors' opinions or evaluations.

Wealthfront Raises Account Yield To 4.55% After Fed’s Rate Hike

For folks who want to retain as much buying power from their dollar as possible while inflation remains stubbornly high, a high-yield savings account is an option worth considering. 

Wealthfront is the latest fintech to join the high-yield hype. The automated investment platform is now offering a 4.55% annual percentage yield (APY) on the Wealthfront Cash Account—rising to the top of the heap. It joins other big names such as Apple, Robinhood and Webull in offering rates above 4% for certain customers.

Savings accounts aren’t just the only high-interest options for people who want over 4% returns on their money. Two relatively safe investment tools are I bonds and certificates of deposit (CDs). I bonds are U.S. Treasury securities that got very popular over the past year because of their high-interest rate. As of May 1, purchasers will earn 4.3% interest. 

CDs are an old investment tool that has also gained attention in recent months because of their 5% (in some cases) interest rates.

Here’s what else you should know
this week:

Fed Rate Hike Means Credit Card Holders And Other Borrowers Will Pay More 

If you have a credit card balance, it’s time to start slashing it. The Fed just ratcheted up rates, which means interest rates on debt like credit cards, home equity lines of credit (HELOCs) and adjustable rate mortgages are about to increase. Check out these debt-reducing tips.

Millions Of TurboTax Users Will Soon Receive Settlement Money. See If You Qualify

Intuit, the parent company of popular tax software TurboTax, is on the hook for $141 million after being accused of luring low-income taxpayers into paying to file their taxes when they could’ve gotten for free. Now, millions of Americans are entitled to up to $85 in compensation.

Struggling FHA Borrowers Can Now Get A 40-Year Mortgage Modification

If you have an FHA mortgage and can’t afford the payments, a new solution will be available starting on May 8. The 40-year mortgage modification has just become a permanent tool in helping people avoid foreclosure. 

Best Travel Credit Cards Of  2023

It’s easier than you think to leverage your credit card rewards to snag award flights and upgrades. Be sure to pay off your balance in full to avoid hefty interest charges that will erase your potential savings.

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