Are there positives to rising interest rates?

Rising interest rates attract attention because it costs consumers more to borrow money, but the flip side is that people have the potential to earn more on their savings.

Rates and products are different in each financial institution. Some have increased their yields on checking and savings accounts, while others are now offering more attractive rates on certificates of deposit.

Jeremy Blair, vice president of finance at Mountain America Credit Union (MACU), says they have a limited-time offer, for example, for 18-month certificate accounts earning an annual percentage return of 4%, which is the highest rate they have offered in years. .

There is also a 60 month certificate earning 3.75% APY.

Both include a unique rate-up option to allow members to increase their earnings if the credit union offers a higher rate in the future.

This can be opened at a branch or online at MACU.com.

We asked Blair to tell us if a certificate or a savings account is better for you.

He said, “It depends on what you want. For those who want more cash to be able to use these savings regularly, this will favor a savings account. But if you have enough liquid savings and are looking to earn a bit more to help offset inflation, a certificate account is another option.

There are also differences in certificates. You choose a length of time you want to leave the money in the certificate, or the term. You can withdraw your money earlier than the term, but you will usually have a penalty for doing so.

Blair went on to say, “Besides the term, there are two types of certificates that I would like to discuss. The first is a standard certificate. With this, you put in a certain amount of money and leave it there for the duration or Depending on your institution, the money will either earn the same fixed rate you signed up for, or you can purchase an option like the one Mountain America offers, where for a slightly lower initial rate, you get a one-time option to increase the rate of your certificate if the certificate rate offered by the institution increases.As I mentioned earlier, some of our special offer certificates already include this option of increase in the rate.

The second type of certificate is the flexible or growth certificate. Because this varies by bank or credit union, you’ll want to do some research. With the growth certificate, you don’t have to put all the money up front. Instead, you put whatever you want in the beginning and lock in that rate. Later, you can keep adding money – up to a maximum limit – to increase your earnings. You may not necessarily have the ability to raise your rates, but you also won’t have to invest as much up front and can grow your savings along the way.

You can learn more by visiting your local MACU branch or by visiting macu.com/must-reads.

About Wanda Reilly

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