Top High-Yield Savings Accounts Are Still Beating Inflation. Here’s Why That’s Important

Personal finance fact: Your money loses purchasing power over time, especially if it’s in a savings account that isn’t earning interest.

But there’s good news for savers, especially in the wake of macroeconomic uncertainties stemming from rising tariffs: The top savings yield, as tracked by Bankrate, has continued to outpace inflation for the past two years.

The current savings rate environment features many high-yielding savings accounts with annual percentage yields (APYs) that are beating inflation, which is currently at 2.4 percent year-over-year as of March, according to the most recent Consumer Price Index. That wasn’t the case until inflation came down from 9.1 percent in June 2022 to 3 percent in 2023, as the Fed raised rates 11 times between those two years.

Despite the last rate cut by the Federal Reserve in December 2024, which is currently at 4.25-4.5 percent, savings rates have remained elevated.

Inflation peaked in the summer of 2022. But you likely weren’t going to earn a 9 percent annual percentage yield (APY) in a savings account from a bank insured by the Federal Deposit Insurance Corp. (FDIC).

Luckily, inflation has come down drastically over the past three years, but top high-yield savings accounts are still beating inflation, even as the Federal Reserve cuts interest rates, and by extension, as banks lower APYs on deposit accounts. Here’s a breakdown of the inflation rate and how it compares to current yields on savings accounts.

How does inflation affect savings?

Money that doesn’t keep up with inflation is losing purchasing power.

Say, for example, you spent $20 on goods and services in March 2019. And you also put a $20 bill in your desk drawer and inadvertently placed it there for six years. Now, in March 2025, you’d likely need $25.16 to buy those same goods and services, according to the U.S. Bureau of Labor Statistics’ CPI Inflation Calculator.

Because your money was in a drawer and not earning interest, you’d either have to consider spending less or you’d have to scrounge an extra $5.16 to pay for the bill.

That’s how inflation affects your savings. Having that money in a high-yield savings account paying a competitive yield would keep up with inflation better than the money that would merely sit in your home not working for you. And since March 2023, the top-yielding account tracked by Bankrate has been outpacing inflation.

Reasons why keeping up with inflation matters

Earning an APY that’s not only keeping up with inflation, but that’s surpassing it, helps maximize your savings at a time when prices remain elevated on various goods and services. This, ultimately, gives you the ability to afford more of the things you want and need.

Here are five reasons why keeping up with inflation matters.

1. A dollar today won’t buy as much as it will in the future.

Prices generally increase over time and money that isn’t keeping pace with inflation loses purchasing power over time. So, that $50 you got as a gift November 2019 but stashed in your sock drawer could have bought $50 worth of goods and services back then. But in November 2024, you’d need an extra $11.33 to have the same buying power.

If you’d put that $50 in a five-year certificate of deposit at 3.40 percent APY, which was one of the highest yields available for that term length in 2019, according to Bankrate data, you would have earned $9.10 in interest.

“If I have my money earning money at some percentage — even if it’s not exactly the same as inflation — and if I’m maximizing my savings, I get closer to meeting my inflation needs when inflationary periods hit,” says Jill Schlesinger, certified financial planner and business analyst for CBS News.

2. You actually have the opportunity to beat inflation right now.

A savings account at the national average rate hasn’t outpaced inflation during a month since October 2015 but top yields are beating inflation by more than two percentage points right now.

If you’re banking with a big bank though, you’re likely not beating inflation. Many of the biggest banks pay even less than the national average rate. Bankrate’s Online Savings Survey published in March 2024, found that 17 percent of people weren’t earning any interest on savings, and 11 percent were unsure how much interest they were earning.

But if you put money in a savings account at an online FDIC-insured bank that’s paying a competitive yield, you’ll beat the current inflation rate and protect your purchasing power.

3. Inflation matters for retirement.

No matter whether you’re many years from retirement or are already retired, you need to keep up with inflation during retirement because you’ll likely be earning less. And your top-earning years are likely behind you.

“If you’re planning for retirement, and you are planning to say, ‘OK, I can live on $5,000 today,’ Well, if $5,000 today is … not the same amount of money as $5,000 ten years from now, you’ll need more money,” Schlesinger says. “So your money that you have has to grow faster than the rate of inflation to simply meet the needs that you have.”

Inflation will affect someone retiring in around five or ten years both before and during retirement.

• $10,000 in March 2020 has the same buying power as $12,389.79 in March 2025.
• $10,000 in March 2015 has the same buying power as $13,543.98 in March 2025.

Here’s a look at how inflation impacts money today versus 20 and 30 years ago:

• $10,000 in March 2005 has the same buying power as $16,544.18 in March 2025.
• $10,000 in March 1995 has the same buying power as $21,122.79 in March 2025.

Source of calculations: CPI Inflation Calculator, Bureau of Labor Statistics

4. Inflation isn’t likely to go away.

People should plan on an average inflation rate of at least 3 percent over the long term, McBride says.

“Essentially, a growing economy will have inflation,” Schlesinger says. “So the reason why the Fed really wants to control inflation is that inflation is quite pernicious. It impacts every single person.”

5. Avoid a “double whammy.”

When high inflation and market losses combine, that’s what Schlesinger calls a “double whammy.” And it can be bad for your finances. For example, the Standard & Poor’s 500 stock index was down 18.1 percent in 2022 and inflation reached 9.1 percent in June 2022.

You can’t control the market, but you can, at least, try to have your savings outpace inflation.

Open an online savings account with a competitive yield

To outpace inflation, find the highest-yield savings account, at an FDIC-insured bank, that works for you. You’ll typically find the highest yields at online banks. Look for consistency in APY, because rates on savings accounts are generally variable.

You also want to make sure the account has a minimum opening deposit amount you’re comfortable with and that it doesn’t have any fees that are going to eat away at your competitive yield.

Opening an account online is usually a quick and straightforward process. You’ll be asked for information such as your name, Social Security number, date of birth and street address.

These days, some high-yielding savings accounts are earning more than 350 times the standard yield offered by many big brick-and-mortar banks. For perspective, $10,000 in a high-yield savings account that earns 4.50 percent APY would earn around $449 more in interest after a year than in an account that earns merely 0.01 percent APY, which is what some of the biggest banks are paying.

Bottom line

It’s easy to feel good about the money you’ve saved, but the money you have right now won’t be able to buy as much in the future. Your money loses purchasing power when the yield it’s earning doesn’t outpace the rate of inflation. Keeping up with inflation is a marathon, not a sprint. You can make sure you’re keeping up with it by having your savings in a competitive-yielding account, which are usually found at online, FDIC-insured banks.