Why the 10-Year Treasury note's historic highs is a green light for you to save

An important economic indicator that you may not have paid much attention to, called the 10-year Treasury yield, has hit a new high. For the first time since 2007, on Oct. 19 and again on Monday, the yield on the benchmark 10-year Treasury note hit 5%, and remains near its 16-year high.

Why does that matter? Because the rising yield the 10-year yield is a barometer for the interest rates on mortgages, student loans and other forms of borrowing will likely stay high for the foreseeable future. On the flip side, these rates are good news for savers with a high-yield savings account or a CD. Below, CNBC Select breaks down ways to grow your wealth in this high-rate environment.

Treasury notes are a kind of security issued and backed by the government (there are also bills and bonds); that means you'll get your money back with interest unless the United States can't meet its financial obligations and defaults on its debt (which has never happened before). Because of this, Treasury notes, which come in 2-year, 3-year, 7-year, 5-year and 10-year maturity terms, are seen as low-risk investments. A Treasury security's yield is the rate of interest the government pays you for buying a security since you're essentially lending money to Uncle Sam.

When you buy a Treasury note, the government pays you a fixed interest rate on the money you've invested, every six months for the duration of the note (that's 10 years with a 10-year note). At the end of that period, when the security matures, you get your initial deposit back and you keep any interest earned.  

Generally, with lower risk comes lower reward, and the return on notes is generally not high. But thanks in part to the market's expectation that inflation rates will remain high for a sustained amount of time, the yield for the 10-year note has reached its current historic levels.

Treasury notes are sold at regularly scheduled auctions held through TreasuryDirect.gov. The next auction for 10-year notes is scheduled for Nov. 8, and you should note that there's no guarantee what the actual interest rates of those securities will be — that's only determined at the time of auction.

If you want to make some money off high Treasury yields without directly buying notes, you can invest in exchange-traded funds that expose you to a range of Treasury securities. One advantage of investing in a Treasury ETF is that the fund may pay you more often than a Treasury note.

Using a brokerage platform can help you access these ETFs and a variety of other funds. Our top picks for brokerage accounts include Schwab for its commission-free trading and Ally Invest for its free research tools to help you understand every investment.  

Another way to take advantage of high interest rates — which the 10-year yield is signaling may stick around for a while — is with a high-yield savings account, which also keeps your money easily accessible (unlike a Treasury note).  

High-yield savings accounts function like any other savings account but provide higher interest rates. While the typical U.S. savings account earns 0.46% APY according to the FDIC, some high-yield savings accounts can earn more than 5% APY. 

Some of CNBC Select's top picks for high-yield savings accounts include LendingClub's High-Yield Savings for its strong combination of a high APY, no minimum balance requirement and no monthly fees. UFB Direct, our runner-up choice, also offers a high-yield savings account with no minimum deposits and a free ATM card.  

It's worth noting that the interest rates on high-yield savings accounts can change at the discretion of the bank or financial institution offering them. If interest rates continue to increase, your high-yield savings account's interest rate could, too. And, if the Federal Reserve raises interest rates at its next meeting (held Oct. 31 to Nov. 1), rates on high-yield savings accounts could go higher.  

The 10-year Treasury yield has hit a high not seen in more than a decade. To benefit, you can buy Treasury securities directly or an ETF that invests in them. Savers can also benefit from high interest rates on high-yield savings accounts.

At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of financial products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.

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