Interest rates are rising (and 3 things you can do about it)

The Federal Reserve raised interest rates again last week. This was the fourth increase in 2018.

Here’s what this means for you:

If you have savings, you may be able to earn more interest by moving your money to a high-yield savings account. Don’t expect your bank to increase your rate automatically — most of them won’t.

American Express is one of the banks paying a great rate right now — they increased their rate to 2.10% APY on December 20th. See how much you can earn with their online calculator.

If you have investments, pay close attention to the stock market because higher interest rates have historically resulted in stock market declines. In fact, the stock market is already down more than 8% this year (based on the S&P 500 index).

Also consider speaking with a professional financial advisor. SmartAsset can match you with local advisors for free — simply fill out this short questionnaire.

If you have debt, higher rates mean that you can end up paying more interest on your loans — this is because most banks have “variable” interest rates which go up when the Prime rate does. Watch out, because your bank is not obligated to tell you when the Prime rate increases, so your rates can quietly creep up over time.

To protect yourself against rising rates, consider consolidating your debts using a fixed-rate loan. Loans through LendingClub always have fixed rates so they could be a good option.

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