Save and Invest

High-yield cash management accounts are cutting their interest rates—here are your best options


The economic uncertainty surrounding the coronavirus outbreak is having ripple effects across the U.S. economy — including in your savings account.

That's because the Federal Reserve cut its benchmark interest rate by half a percentage point earlier this month in response to the virus's threat. More cuts are anticipated this year. In response, robo-advisors Betterment and Wealthfront lowered the rates on their cash management accounts in the last week in line with the Fed's rate cut. Betterment is offering 1.37% APY as of March 10, and Wealthfront is offering 1.27% as of March 5.

The highest rates for savings accounts are around 1.7%, according to, which tracks more than 60 savings accounts. That includes:

Ally, Barclays and Discover are offering around 1.6% as of Wednesday.

Again, these yields are variable, meaning they can change at any time. And long-term effects of COVID-19, the name of the virus, are still unclear. If you have a Betterment or Wealthfront account, it likely isn't worth the effort to switch for such a small difference.

That said, if you have a savings account with a rate closer to the national average of 0.09%, it does make sense to open a high-yield account so that you're earning more on your savings.

Don't open an account based solely on the interest rate, though. You'll also want to take account minimums and monthly fees into consideration. While you don't need to chase the absolute best rate on savings accounts, do look for something competitive and secure.  

Other account options 

Savings accounts offered by banks and cash management accounts offered by other types of financial institutions are great places to stash your emergency fund and other money you want to be able to access easily. But if you have funds you don't need immediately but don't want to invest (say, you're saving for a down payment or for a wedding or other big event in a year or so), a certificate of deposit, or CD, is another option that could give you a competitive rate. 

CDs house your money for a predetermined period of time — typically three months to a year — and currently offer rates between 0.55% and 2.06%, according to Bankrate, depending on how much you have to deposit and how long you leave your money untouched.

That said, those with the highest APYs will likely have a higher minimum deposit requirement than a high-yield cash management or savings account. Marcus is offering 1.85% on a one-year CD with a minimum deposit of $500, for example. However, for most people, the difference between the CD's APY and Marcus's savings account APY likely won't amount to much. 

Prioritize emergency savings

Regardless of where you're saving, the most important thing is that you have enough money set aside for emergencies. No one knows what the future holds, or what will happen to the U.S. economy over the next few months. But already, industries — particularly hospitality and travel — are dealing with fallout from the virus, including some layoffs.

Because the U.S. doesn't mandate paid time off for illness, you'll want to prioritize saving more now, if you can, by cutting out extra expenses and keeping daily costs low. These articles offer some other tips on lowering spending: 

You'll want at least three to six months worth of daily living expenses saved, in the event that you lose your job, face reduced hours, cannot work or need to care for someone else due to illness. If you're a retiree, the drop in the stock market could also affect your cash flow for a while, which you'll need to take into account. 

Check out: The best credit cards of 2020 could earn you over $1,000 in 5 years

Don't miss: What this surprise Fed rate cut means for you

How a 27-year-old making $112,000 outside of Chicago spends her money
How a 27-year-old making $112,000 outside of Chicago spends her money