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There are many downsides to high interest rates, but one bright side is that elevated rates can make it easier to earn more money on your savings. For example, certificate of deposit (CD) interest rates and other interest-bearing account rates are closely linked to the federal funds rate. As a result, when the Federal Reserve raises the benchmark interest rate, most banks and credit unions raise rates on savings accounts, money market accounts and CD accounts.

The Federal Reserve continued its rate-cutting campaign Wednesday, Dec. 18, marking the third cut of 2024. The central bank shaved off another 25 basis points from its benchmark rate, in line with expectations.

The past year has been a whirlwind for the mortgage industry. During the first week in January, the average 30-year mortgage rate was 6.62%, according to data from Freddie Mac. Rates continued to climb throughout the first half of 2024, hitting a weekly high of 7.22% at the start of May.  

When it comes to planning for retirement, most Americans have some basic ideas about best practices. We commonly hear advice such as max out your 401(k), don’t spend frivolously right before retirement, and consider downsizing as you enter your golden years.