The Fed Didn't Cut Interest Rates. That's Good News for Savers

2. High-yield savings accounts

High-yield savings accounts are a relatively secure place to store savings. Like bank money market accounts, high-yield savings accounts at banks and credit unions are also backed by the FDIC or NCUA, but they generally don’t offer check-writing privileges. Because of that, they typically pay a bit more interest than money market accounts. This week, many high-yield savings accounts on DepositAccounts.com offered around 4 percent, which amounts to interest of $400 a year on $10,000.

3. Certificates of deposit (CDs)

A CD is a deposit at a bank or credit union that earns interest on a lump sum for a fixed period. You typically must leave it for that agreed-upon period of time or you will be charged a penalty. People who bought CDs in recent years will continue to earn high yields, since CD interest rates are locked in at the time of purchase, and rates on new CDs will likely stay strong while the Fed holds its benchmark rate at its current level.

According to recent NerdWallet data, the best one-year CDs offered as high as 4.1 percent interest, or $410 a year for a $10,000 deposit. The same insurance limits apply to CDs as to any other bank account.

4. U.S. Treasury bills

The only thing safer than money backed by the FDIC or NCUA is money directly backed by the U.S. Treasury, and there is no $250,000-per-institution limit. Treasury bill are like CDs, only they can be sold in the open market. They are also exempt from state income taxes, so you only have to pay federal taxes on the interest. 

A one-year Treasury bill was yielding 3.37 percent on Jan. 27, or $337 a year for each $10,000. If you live in a high tax state, this could yield even more than a CD after taxes due to the state (and local) tax exemption for T-bill interest.

Treasury bills can be bought through most financial institutions, including investment firms such as Fidelity, Schwab and Vanguard. They can also be purchased at banks or from the U.S. government through TreasuryDirect.gov.

5. Treasury Inflation Protected Securities (TIPS)

TIPs pay a fixed amount of return plus inflation, measured by the federal Consumer Price Index. Like Treasury bills, they are backed by the U.S. government, interest is exempt from state taxes, and you can sell them in the open market if you don’t want to wait until they mature. You can purchase them at the same places you buy Treasury bills.

The shortest period the U.S. government issues TIPS for is five years. Recently, TIPS that matured in 10 years yielded 1.875 percent, plus inflation, according to TreasuryDirect.gov. That equates to $187.50, plus whatever inflation turns out to be, for each $10,000 invested.