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There is a flip side to rising interest rates you may not have heard about

How interest rates can affect your savings
Posted at 1:44 PM, Aug 26, 2022
and last updated 2022-08-26 15:44:43-04

We hear a lot about rising interest rates, which make it more expensive for people getting a loan for a home or vehicle.

But, rising interest rates have a flip side: people have the potential to earn more on their savings.

Jeremy Blair, VP Finance for Mountain America Credit Union, says rates and products will be different for each financial institution, but they are offering a limited-time offer for 2 to 5-year certificate accounts earning 2.75% annual percentage yield, which is the highest rate we've offered in years. That can be opened in a branch or online at

When it comes to whether a certificate or savings account is right for you, Jeremy explained that if you use the money you invest regularly, a savings account may be better.

But, if you have enough liquid savings and are looking to earn a little more to offset inflation, a certificate account is another option, Jeremy says.

Jeremy also explained the difference in certificates. First, he says you choose a length of time you want to leave the money in the certificate, or the term. You can get the money out earlier than the term, but you will typically have some penalty for doing so.

He also explained that there are two types of certificates. The first is a standard certificate. With that, you put in a certain amount of money and leave it there for the length or term of the certificate. Depending on your institution, the money will either earn the same fixed rate you signed up for, or you may be able to purchase an option like the one Mountain America offers, where for a slightly lower initial rate you get a one-time option to bump up your certificate's rate if the institution's offered certificate rate increases.

The second type of certificate is the flexible or growth certificate. Again, this varies by bank or credit union, so you'll want to do a little research to see what's out there. With the growth certificate, you don't have to put all the money into the certificate account up front. Instead, you put in what you want in the beginning and lock in that rate. Down the road you can continue to add money – up to a maximum limit -- to increase your earnings. You may not necessarily get the option to take a rate bump, but you also don't have to put in as much up front and can grow your savings along the way.

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