Consumer Corner: How can I benefit from high interest rates?

NBC6 Consumer Investigator Sasha Jones is hitting the streets of South Florida to find out what questions you are burning to know the answers to.

In our new series Consumer Corner, NBC6 Responds takes your money questions to the experts.

Each week, we will feature a different consumer question.

Consumer: Jess McFarlane

Question: “During this time when interest rates are really high how can I benefit? It seems like a negative but what are the things I can do with my money right now?”

Expert: Ted Rossman, Senior Industry Analyst with Bankrate.

Answer:

Rossman said high interest rates make room for some interesting short-term saving options.

“That short-term, risk-free kind of money, that should go in a high-yield saving account," said Rossman said. "This is the positive of higher rates, these are the best saving rates we’ve seen in many years, right now they go as high as 5 and a quarter percent, on a totally liquid, totally federally insurance bank account.”

Rossman says consumers should draw a distinction between long-term and short-term money. He says money you don’t need in the next five to 15 years could go into the stock market, but if you are looking for less risk for your short-term money a high-yield savings account could offer better benefits than a traditional savings account.

A higher interest rate means your money can grow faster as it sits in your account. If you choose to place your money in a high-yield savings account it is safest to use a federally insured bank.

He says certificates of deposit offer another great opportunity for short-term savers.

"CDs can be a good option as well, one-year CDs go as high as about 5.6 percent, cash investments are so attractive,” Rossman said.

When you put your money in a CD you earn a fixed interest rate for a specific amount of time. Typically, the longer the term the higher the interest you will earn on your money. But if you choose to put your money into a CD, be sure to find out if there are any penalties for pulling your money out early.

These are only two options, it is always best to speak with a financial professional when making financial decisions.