For more than a year, rates of at least 4% have been the norm for high-yield savings accounts. Some of the best savings accounts even offer APYs above 5%. Now is a good time to have some money saved.

Alas, nothing lasts forever. After a recent rate cut by the Federal Reserve, savings rates have already fallen slightly from where they were at the start of the year. And with more potential cuts on the horizon, 4% rates could become a thing of the past.

Don’t Get Attached to Your Savings Account APY

Although each bank sets its own interest rates, they use the federal funds rate as a guideline. The Federal Reserve controls the federal funds rate. It meets eight times a year to decide whether to maintain the current federal funds rate, reduce it, or increase it.

The Fed has kept rates high to fight inflation. With inflation falling, the Fed cut rates by half a percentage point in September. In response, banks lowered rates on their high-yield savings accounts. For example, mine went from 4.40% to 4.10%.

Our picks for the best high-yield savings accounts of 2024

American Express® High Yield Savings APY 4.00% Pricing information Annual percentage yield of 4.00% as of November 3, 2024 Member of the FDIC.	APY 4.00% Pricing information Annual percentage yield of 4.00% as of November 3, 2024	Min. earn $0
Capital One 360 ​​Performance Savings APY 4.00% Pricing information Check the Capital One website for the most up-to-date pricing. The Advertised Annual Percentage Yield (APY) is variable and accurate as of October 23, 2024. Rates are subject to change at any time before or after account opening. Member of the FDIC.	APY 4.00% Pricing information Check the Capital One website for the most up-to-date pricing. The Advertised Annual Percentage Yield (APY) is variable and accurate as of October 23, 2024. Rates are subject to change at any time before or after account opening.	Min. earn $0
CIT Platinum Savings APY 4.70% APY on balances of $5,000 or more Pricing information 4.70% APY on balances of $5,000 or more; otherwise, 0.25% APY Min. earn $100 to open an account, $5,000 for maximum APY Member of the FDIC.	APY 4.70% APY on balances of $5,000 or more Pricing information 4.70% APY on balances of $5,000 or more; otherwise, 0.25% APY	Min. earn $100 to open an account, $5,000 for maximum APY

As I wrote above, high rates are still available, typically ranging from around 4-5%. But there will likely be more rate cuts to come. The next Fed meeting will take place on November 6-7. The current chance of a quarter-percentage rate cut is 93.1%, according to CME Group’s FedWatch tool.

In total, rates are expected to fall another half a percentage point this year and another percentage point in 2025.according to Fed dot plot projections. Many high-yield savings accounts will likely have rates below 4% after another rate cut. With multiple rate cuts, it may be impossible to find savings accounts paying up to 4%.

It’s not as bad as it seems

Lower savings rates are disappointing, especially if you’re used to high interest payments. Keep in mind that rate cuts won’t necessarily significantly reduce your income. If your savings account APY drops by 1%, that seems like a lot. But for every $1,000 you save, that’s only $10 a year in interest.

It may also be helpful to look at the positive side of falling interest rates. This happens because inflation is falling, which is good for consumers. Rate cuts also mean you can get a better deal when borrowing money. This is good news for anyone considering applying for a mortgage.

If you want to continue earning as much interest as possible, it helps to have your money in the right account. In this case, consider the Western Alliance Bank High-Yield Savings Premier account. It has an APY of 4.81%, one of the highest rates I’ve found, and no monthly fees. Click here to learn more and open an account today.

Deciding what to do with your savings

A high-yield savings account remains one of the best places to save. You’ll earn a competitive APY with this account type, even if it’s not as high as before. You will also be able to withdraw money at any time without penalty.

There’s another option that lets you lock in rates when they’re high: a certificate of deposit (CD). You won’t be able to withdraw your money whenever you want – you must keep it in your CD for the entire term to avoid an early withdrawal penalty. In exchange, you get a fixed APY for the life of the CD.

Want to guarantee a high APY with a CD? Discover our selection of the best CDswith durations ranging from one month to 10 years.

There is no guarantee that savings rates will continue to fall, but that is the most likely scenario. Now that you know what could happen, you can decide whether to put your savings in a CD or stick with a high-yield savings account.