Top-Notch Cash Exchange Rates - May 24, 2025
In light of the economic uncertainty triggered by President Donald Trump's tariff policy, it may be wise to boost one's cash reserves at present. On a positive note, the Federal Reserve is unlikely to lower interest rates in the near future, which means the current favorable returns on cash investments should persist for a while.
The highest-yielding savings accounts offer returns up to 5.00%, while certificates of deposit (CDs) yielding 4.50% can be locked in until as late as summer 2026. At brokerages and robo-advisors, returns of 4.00% or better are generally possible. Additionally, U.S. Treasuries offer returns of up to 5.04%.
The Federal Reserve's benchmark federal funds interest rate remains high, and it appears likely that the central bank will keep this rate steady for two more meetings. This fact is encouraging for savers, as the rates paid on savings, money market, and CD accounts are directly influenced by this benchmark rate.
Cash investments come in three main varieties: bank and credit union products, brokerage and robo-advisor products, and U.S. Treasury products. Each offers its own advantages and should be considered according to one's individual financial needs and goals.
Bank and credit union products include savings accounts, money market accounts, and certificates of deposit. Brokerage and robo-advisor products include money market funds and cash management accounts. U.S. Treasury products include T-bills, notes, and bonds, as well as I bonds.
It is important to note that savings and money market account rates can change at any time, while CD rates are guaranteed for the duration of the term. Money market fund yields fluctuate daily, and rates on cash management accounts are more fixed but can change at any time. Treasury securities pay their rate through maturity and can be bought directly from TreasuryDirect or through a bank or brokerage.
Here's a summary of the top rates as of Friday's market close:
Bank and Credit Union Rates
- Savings Accounts: Leading APYs range from 4.35% to 5.00%
- Money Market Accounts: Top APY is currently 4.37%
- Certificates of Deposit: Best APYs are 4.50% or higher
Brokerage and Robo-Advisor Rates
- Money Market Funds: Yields range from 3.93% to 4.21%
- Cash Management Accounts: Several popular brokers offer rates of 3.83% to 4.00% APY
U.S. Treasury Rates
- Treasury Bills, Notes, and Bonds: Rates range from 3.96% to 5.04%
These rates may change, and it is important to shop around for the best rates and terms.
- With the current economic uncertainty, one might consider boosting cash reserves by investing in high-yielding savings accounts, certificates of deposit, or money market funds offered by banks, credit unions, brokerages, or robo-advisors.
- The Federal Reserve's steady interest rates are beneficial for savers, as they impact the rates paid on savings, money market, and CD accounts, offering returns of up to 5.00% for savings accounts, 4.50% for long-term CDs, and fluctuating yields for money market funds.
- Personal finance experts suggest comparing rates and terms across different banking and insurance institutions, such as banks, credit unions, brokerages, and US Treasury, to ensure getting the best returns on cash investments, whether it's through savings accounts, money market accounts, certificates of deposit, money market funds, cash management accounts, or U.S. Treasury securities like T-bills, notes, and bonds.
