867 - Should You Be Saving Money Right Now? by Dave Meyer

The last year or so has been challenging for investors and savers alike. With inflation raging and many of the major markets in correction territory, it’s been difficult to find a safe place to park cash. Bond yields have been below the rate of inflation, and savings accounts have offered pathetic interest rates. Any money held in cash or bonds has been losing spending power against inflation. For real estate investors who often need time to save up cash between purchases, this can be a problem.

Luckily, it looks like things are starting to change. One silver lining of recent rate hikes is that as the Fed raises their federal funds rate, bond yields and the interest rate paid on money market and savings accounts tend to rise. This is exactly what we’re seeing. These low-risk assets now offer the potential to earn a real (inflation-adjusted) return. 

Bond yields have fluctuated between 3.5% and 4% for the last several months. According to Bankrate, high-yield savings and money market accounts are now offering between 3.3% – 4.3% as of this writing. 

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