Is a high-yield savings account worth opening before a September Fed rate cut?

A highly anticipated interest rate cut finally looks imminent for the weeks ahead. After the Federal Reserve issued three rate reductions in the final months of 2024, both savers and borrowers anticipated additional, if fewer, cuts in 2025. But that hasn’t quite happened, thanks to a sticky inflation rate and concerns over new and evolving economic policies. Still, the chances of a cut when the central bank meets again in September are growing with the CME Group’s FedWatch tool forecasting the likelihood of a cut on September 17 at more than a 91% likelihood.

While that will be good news for borrowers, it’s less likely to be warmly welcomed by savers. Those who opened a high-yield savings account in recent years, after all, were rewarded with high rates and, thus, significant interest earnings on their money. Ahead of a prospective September Fed rate cut, then, is a high-yield savings account still valuable and worth opening? Savers may be surprised at the answer. Below, we’ll explain why it can still be.

See how much more interest you could be earning with a top high-yield savings account here.

Is a high-yield savings account worth opening before a September Fed rate cut?

While each saver’s individual preferences and goals vary, there remains a compelling case for opening a high-yield savings account this month, even with a September Fed rate cut looming. Here are three reasons why it could be a valuable choice:

Because you can still earn more on your money

Sure, today’s top high-yield savings account rates in the 4.25% to 4.35% range aren’t quite as high as they were 12 to 18 months ago. But they’re still substantial, earning savers more than $4 for every $100 deposited. And with average rates on traditional savings accounts under a minimal 0.40% now, you’re arguably losing money by not making the switch from a traditional account to a high-yield savings one. If the ultimate end goal remains earning more on your money, then a high-yield savings account is still one of the easier ways to accomplish that goal, even if it’s not quite as profitable as it once was.

Get started with a high-yield savings account online today.

Because rate reductions are likely to be gradual (and small)

Even if the Fed does cut rates in September, it’s almost guaranteed to be in a small, 25-basis-point amount. Additional cuts, if they even follow, are also likely to be done gradually and in small amounts. And, considering that high-yield savings accounts mirror Fed rate changes, but don’t directly fall or rise by the same margin, these accounts will likely remain valuable well past any September rate reduction. Still, the sooner you act, the more interest you can earn as high-yield savings account rates won’t be immune to market conditions, either.

Because you’ll maintain flexibility in an unpredictable time

Sure, most economists expect rate cuts in September and potentially later this year. But the economic climate remains largely unpredictable right now. Inflation, after all, just rose in May and June. Unemployment numbers are not favorable, but stock market performance is rebounding after major volatility earlier this year. In this climate, maintaining flexibility is important. And you can do just that with a high-yield savings account, which permits withdrawals and deposits without penalty, in a way that you can’t with a certificate of deposit (CD) account, in which your money will be locked away for months (or even years).

The bottom line

A high-yield savings account isn’t as profitable and valuable as it was this time last year, but it’s far from useless either, even with a pending interest rate cut. Because you can still earn more interest on your money, because rate reductions (when they come) are likely to be small and gradual and because this unique account type will allow you to maintain flexibility in a way alternative savings vehicles won’t, then, yes, a high-yield savings account can still be worth opening ahead of a September 2025 Fed rate cut.