Maximize your earnings – and minimize your losses

4 Money Moves You Should Make ASAP Now That the Fed Has Paused Rates

Maximize your earnings – and minimize your losses – by doing these things now

If you're like many people, chances are you pay more attention to the price of eggs than to what the Federal Reserve is up to lately. But the Fed's actions have real consequences for your money. When the Fed issues a decision on interest rates, it affects everything from how much it costs to borrow money to how fast your savings grow.

The Fed paused interest rates for a second time this year at today's Federal Open Market Committee meeting. Here's what that means for your money -- and what you can do reap the biggest benefit.

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Make these 4 money moves ASAP

Make the most of the Fed's rate pause by doing these things now.

✅ Open a certificate of deposit

A rate pause means there's still time to score a high annual percentage yield, or APY, on a CD. Banks tend to follow the Fed's lead when setting CD rates, so we're likely to see APYs hold steady for the time being.

"Investors still have an opportunity to lock in very attractive interest and CD rates, which are paying far more than inflation," said Noah Damsky, CFA, Principal of Marina Wealth Advisors.

CDs are unique deposit accounts that come in terms typically ranging from a few months to several years. You'll need to leave your money in the CD for the entire term to avoid any early withdrawal penalties. In exchange, the bank or credit union will pay you a fixed return for the entire term based on the interest rate in effect when you open the CD.

Some of today's best CDs offer annual percentage yields, or APYs, up to 4.65%. With the Fed expected to cut rates in late spring or early summer, locking in your APY now can protect your earnings if rates drop.

✅ Open a high-yield savings account

A CD is a great home for money you won't need to touch for some time. But what about your emergency savings? You want to keep these funds liquid while still earning the most interest you can on them.

A high-yield savings account can help. Often provided by online banks, high-yield savings accounts offer significantly better returns than the traditional savings options available at major banks. For example, today's top savings accounts pay at least 10 times the national average savings rate.

It's usually easy to access your funds in a high-yield savings account, although there may be withdrawal limits. For example, you may pay a fee if you withdraw money from your account more than six times in any given month.

Interest rates on high-yield savings accounts are variable, which means they tend to fall when the Fed cuts the federal funds rate. So you'll want to open a high-yield savings account ASAP to take advantage of today's great APYs while you still can.

✅ Hold off on big purchases

If you're thinking about financing a new car or other large purchase, consider waiting until the Fed begins cutting rates again to avoid paying more in interest charges.

If you're in the market for a new home, it's also smart to hold off. Mortgage rates remain high, and experts don't expect a Fed rate pause to bring them down.

✅ Pay down debt

Debt -- especially high-interest debt -- can significantly hamper your financial stability. When you spend a large amount of money on interest, that money is no longer free for savings, investments or even to cover daily expenses.

Paying down credit cards and other high-interest debt is a smart move in any rate environment, but especially while interest rates remain high. You may also want to consider a debt consolidation loan to combine your outstanding debt at a lower interest rate.

Keep in mind that now is the time to start shopping, not necessarily the time to open a new debt consolidation loan. For now, search for a reputable lender you're interested in working with so that, when rates do start to fall, all you'll need to do is apply.

The bottom line

You can't control what the Fed does with interest rates, but you can take some smart steps to make the most of its decisions. Maximize your finances now, and you'll be poised to benefit from the Fed's latest move.