Save more in 2024 by capitalizing on these 3 things

Run, don’t walk, to take advantage of this year’s savings opportunities. With interest rates higher than they’ve been in years, it’s the ideal time for savvy savers to take advantage. (Or to make it the year you become a savvy saver.)

Though rate cuts are expected to get cut this year (pending a decision from the Federal Reserve), experts predict that 2024 will be a solid year for savers — if they act now.

Doing so can give you access to not only more capital but more financial freedom. With higher savings, unexpected expenses will feel less daunting. With more money in the bank, things like applying for loans or mortgages can be easier. And by maximizing compound interest, you can maximize feeling more secure about your finances. 

Between taking advantage of CDs, automating savings, and paying down high-interest debt, let’s walk through the three ways to capitalize on today’s high rates and save more in 2024. 

CD (otherwise known as certificate of deposit) rates are likely reaching their peak. Putting your money in a CD now could be a lucrative saving strategy for those looking to benefit from tenured savings and do it before rates go down.

But, for that, CDs often pay a slightly higher rate to compensate you for tying up your money, Menard tells us. There are different types of CDs to consider, varying in features and minimums. But what all types have in common is that it’s the best time to get into one. 

Menard explains that if you put $1,000 in a one-year CD, at .5%, you’d make $5, but at 5%, you’d make $50. That’s a 900% difference! And according to MarketWatch, some CDs were offering a return of 6.5% in January 2024.

“Automating a monthly transfer from your checking to your savings* account is always good, and if you can only do one thing, do that,” suggests Menard.

Think of it like having an easy button for your savings. With no additional effort needed on your part, “you don’t have to think about it or remember to do it,” she adds. It also helps you avoid present bias and save money over time.  

*Plus, it’s not only CDs that have great rates right now. High-yield savings accounts also offer a way to take advantage of today’s high-interest rates while giving you the peace of mind that you can access the money should you need it. High-yield savings accounts still compound interest, accumulating interest on your initial balance and the interest it generates.

As of February 2024, some high-yield savings accounts offered upwards of 5%. 

Interest rates are high, which is good for savers but not so great for those with debt. While it dropped during the pandemic, credit card debt rises even as inflation cools. 

“If you have debt with a high-interest rate, like credit card debt, do prioritize paying that off,” suggests Menard. At the time of writing this, the average credit card interest rate is at 27.91%, according to Forbes. Check the interest rate, as other types of debt may not have as high an interest rate, making it easier to balance paying off debt and adding to your savings. 

Consider working towards putting enough money in savings to cover unexpected expenses, so you don’t have to keep using that credit card as your emergency fund, says Menard. 

And to not add to your debt, consider adding friction. “You might experiment with waiting 24 hours before making any impulse purchases, and don’t store your payment information on shopping sites,” suggests Menard. “Just adding a little friction, making it take a little time and effort to spend, can help you stop and consider whether you are spending in alignment with what you really value.” 

Check out a few bonus tips to increase your savings and avoid accumulating debt. 

Remember to be kind to your bank account and kind to yourself this year. 

Do yourself a favor by strengthening your money habits, staying on top of financial trends, and don’t avoid checking your account balances. As author and personal finance expert Suze Orman puts it, “If you’re not staying on top of your money, you’re putting your financial well-being at risk.” The more you know, the more you can control, and the more you can be nice to your (compounding) funds.