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The first-quarter estimated tax deadline for 2024 is April 15, which coincides with most taxpayers’ federal tax due date.
You may need to make estimated tax payments for income from self-employment, gig economy work, investment earnings and more.
Tax filers may avoid late payment penalties by sending 90% of 2024 taxes or 100% of 2023 levies if adjusted gross income is less than $150,000.

millann | Getty

If you are racing to file taxes, you could miss another key deadline: the April 15 due date for first-quarter estimated tax payments.
Estimated tax payments typically apply to earnings from gig economy work, freelancing, small business, retirement or investing, which may have no tax withholdings.

If you expect to owe at least $1,000 in taxes, you must make your first-quarter estimated payment for 2024 by April 15.
That can be “tricky” for certain tax filers with federal taxes due on the same day, according to certified public accountant Tom Wheelwright, CEO of WealthAbility.
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Estimated tax payments can help filers avoid penalties, the IRS reminded taxpayers earlier this month. The 2024 payment due dates are April 15, June 17, Sept. 16 and Jan. 15, 2025.
If you skip these payment deadlines, you could trigger an interest-based penalty calculated with the current interest rate and balance due. The penalty compounds daily.

There is a ‘measuring stick’ for payments

Calculating quarterly estimated payments can be confusing for some taxpayers, experts say.
But there is a “measuring stick” to make it simpler, according to certified financial planner Eric Bronnenkant, head of tax at Betterment, a digital investment advisor. 
As long as your payments meet the “safe harbor” rules from the IRS, there won’t be penalties, explained Bronnenkant, who is also a certified public accountant.

You meet those requirements by paying at least 90% of the current year’s tax liability or 100% of last year’s taxes, whichever is smaller.
For example, if you owed $20,000 for 2023, you could divide that by four and pay $5,000 each quarter to meet the safe harbor rules, Bronnenkant said.
The safe harbor jumps to 110% if last year’s adjusted gross income was $150,000 or higher. You can find adjusted gross income on line 11 of Form 1040 from your 2023 tax return.
Of course, you could still owe taxes for 2024 if you earn more than expected and do not adjust your tax payments accordingly.

How to make quarterly estimated tax payments

You can pay quarterly taxes via your IRS online account, which “streamlines” the process because you can check payment history, monitor pending payments and more, according to the agency. 
“Make sure you get the confirmation,” Wheelwright said. “Don’t assume it went through.”
Filers without an IRS account can also pay online via IRS Direct Pay or the U.S. Department of the Treasury’s Electronic Federal Tax Payment System, or EFTPS.
For those who prefer payment by mail, Wheelwright recommends sending it by certified mail with a return receipt because you may “have to prove that you made it on time.”

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New Consumer Price Index data shows inflation is still above the Federal Reserve’s 2% target.
Here’s how to tell just how much those headline numbers affect your bottom line.

A customer picks up a seasoning at a supermarket in Tokyo on February 27, 2024.
Kazuhiro Nogi | Afp | Getty Images

New government inflation data released on Wednesday came in hotter than expected.
That may not be a surprise to consumers who are still feeling the weight of higher prices.

Inflation — as measured by the consumer price index — rose 3.5% from a year ago and 0.4% for the month. The consumer price index, or CPI, tracks the average changes in prices over time for consumer certain goods and services.
“The CPI basket and its movements are meant to be broadly indicative of the price experiences of a wide swath of Americans over time,” said Brett House, an economics professor at Columbia Business School.
For individuals, that means headline inflation numbers may reflect their own experience more or less at any given point in time, he said.

Categories including juices and drinks, motor vehicle insurance or household repairs are up by double-digit percentages in the past 12 months, the CPI data shows.
Consumers who depend on those products and services are likely feeling the effects of inflation.

“People continue to feel the pain of higher prices,” said Eugenio Aleman, chief economist at Raymond James, despite the CPI having declined from its 9.1% year-over-year peak in 2022.
“And that is something that at a feeling level is still negative, because they don’t see any relief,” Aleman said.

How to calculate your personal inflation rate

To get a better sense of how inflation is affecting you and your family, it can help to calculate your personal inflation rate.
“To even understand how inflation affects you, you need to know how the purchases that you make regularly are changing, if at all,” said Douglas Boneparth, a certified financial planner and president and founder of Bone Fide Wealth, a wealth management firm based in New York City.
To get started, gather your spending data.
To come up with a specific calculation as to how inflation is affecting you, subtract your total monthly spending for March 2023 from your total for March 2024. Then, divide that number by your March 2023 spending to get your personal inflation rate.
To get a quicker result, an online personal inflation calculator — like this one from the Federal Reserve Bank of Atlanta — can help.
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Even a more informal look at your grocery spending over the past several months can help you gauge how your bill is changing, said Boneparth, a member of the CNBC FA Council.
With that, you may notice how what you spend on certain categories — milk, eggs, chicken or beef, for example — has fluctuated.
For items that have risen in cost, ask yourself whether you might consider not spending on that particular item at all, Boneparth said. If you can’t do without it, consider whether you might be able to substitute in other products or change the frequency with which you buy them, he said.

Wage increases affect your inflation experience

Other factors beyond your monthly spending determine how inflation has affected you.
The CPI is up a little under 18% since three years ago, according to Greg McBride, chief financial analyst at Bankrate.
Consequently, if your wages haven’t increased by that much over the same period, you’re more likely to feel the pinch of higher prices.
That can contribute to a lack of savings and higher credit card debt, financial consequences many Americans are showing. About 60% of households are living paycheck to paycheck, McBride said.

But the good news is that real wages, or wages adjusted for inflation, are now higher, Aleman said.
Consequently, many individuals are better off today than they were a year or two years ago, he said.
“Of course, everybody would want prices to go back to pre-pandemic,” Aleman said.
Another point to keep in mind is that the CPI typically overstates inflation, Aleman said. That is why the Federal Reserve tends to prefer another inflation measure, the personal consumption expenditures price index. The PCE was up 2.8% over the past 12 months, according to the latest data for the month of February. More

The Biden administration is moving ahead quickly with its new student loan forgiveness plan, with hopes of starting to wipe out people’s debts as soon as this fall.
That action could prove crucial in the upcoming presidential election, experts say.

US President Joe Biden speaks about student loan relief at Madison College in Madison, Wisconsin, on April 8, 2024. 
Andrew Caballero-reynolds | AFP | Getty Images

A race to still forgive debt after Supreme Court verdict

President Joe Biden’s 2020 campaign promise to erase student debt was thwarted at the Supreme Court last June. The conservative justices ruled that Biden’s $400 billion loan cancellation plan was unconstitutional.
After that, the president directed the U.S. Department of Education to examine its existing authority to forgive student debt. Mainly by improving current loan relief programs, the department has cleared the education debts of 4 million people, totaling $146 billion in aid, while Biden has been in office.
Yet Biden has been under intense pressure to do more.
“Over 40 million people were promised cancellation, a number that dwarfs the [people] who have received some measure of relief,” said Astra Taylor, co-founder of the Debt Collective, a union for debtors.

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On Monday, at an event in Madison, Wisconsin, Biden blamed the Supreme Court and Republicans for stopping his first relief plan.
“Tens of millions of people’s debt was literally about to get canceled, but then some of my Republican friends, elected officials and special interests sued us, and the Supreme Court blocked us,” Biden said. “But that didn’t stop us.”
The president announced the details of his Plan B for student loan forgiveness, which is narrower than his first attempt but could still reach tens of millions of people.
Instead of canceling loans for nearly all federal student loan borrowers, this program targets the aid at certain groups of people, including those experiencing financial hardship and graduates of poor-quality schools. Meanwhile, some 25 million people could get interest on their debt cleared under the plan.

Can Biden get borrowers relief by November?

Kantrowitz said he anticipates the Biden administration will try to get people the new relief before they cast their votes in November.
Almost half of voters in a recent survey, or 48%, said canceling student loan debt is an important issue to them in the 2024 presidential and congressional elections. SocialSphere, a research and consulting firm, polled 3,812 registered voters, including 2,601 Gen Z and millennial respondents, in mid-March.

Forgiving student debt could especially help Biden with young voters, a demographic he has been struggling with. About 70% of Gen Z respondents said student debt cancellation was important to them in the election, that same survey found.
The issue is a chance for Biden to differentiate himself from his likely Republican opponent Donald Trump, who has a record of opposing debt relief for students.

Former President Donald Trump speaks during a press conference at 40 Wall Street on March 25, 2024 in New York City. 
Michael M. Santiago | Getty Images

While in office, the former president called for the elimination of the popular Public Service Loan Forgiveness program, signed into law by President George W. Bush in 2007. Trump also sided with the Supreme Court in its ruling to strike down Biden’s plan.
“Today, the Supreme Court also ruled that President Biden cannot wipe out hundreds of billions, perhaps trillions of dollars, in student loan debt, which would have been very unfair to the millions and millions of people who paid their debt through hard work and diligence; very unfair,” Trump said at a campaign event in June 2023. 

Legal threats already brewing

Biden rolled out his first student loan forgiveness plan in August 2022 through an executive action, which he hoped would allow him to deliver the relief quickly. Borrowers were told they could expect the relief within six weeks after applying.
That timeline was stymied, of course, by legal challenges and eventually dashed at the Supreme Court.

Issues like student loan forgiveness, which present a sharp contrast between Democrats and Republicans, are more likely to impact the election.

Mark Kantrowitz
higher education expert

Now, Biden has turned to the negotiated rulemaking process, a difference he hopes will make it harder for the courts to stop him this time.
“The rulemaking process is stronger than executive action,” Kantrowitz said.
But the procedure can be lengthy, with several steps. It involves a committee of negotiators meeting and proposing a rule, the publishing of that proposed rule in the Federal Register and then a public comment period. After all these steps, the U.S. Department of Education can publish its final rule.
As of now, the negotiators have wrapped up their sessions and the Biden administration is poised to release its proposal. In theory, the Education Department could publish its final rule sometime this summer, Kantrowitz said.
Although the regulations legally wouldn’t go into effect until July 2025 based on that timeline, Education Department officials could choose to make some of the provisions effective sooner simply by posting a note in the Federal Register, Kantrowitz said.
“So they could easily implement it before the election,” he said.
However, legal challenges to the plan could delay that goal. Such threats are already brewing.
On Monday, after Biden announced his Plan B for student loan forgiveness, Missouri Attorney General Andrew Bailey, a Republican, wrote on X that the president “is trying to unabashedly eclipse the Constitution.”
“See you in court,” Bailey wrote.
Correction: President Biden issued an executive order tied to student loan forgiveness in August 2022. An earlier version misstated the phrase.

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The federal tax deadline is April 15 for most taxpayers and you can still file for an extension, which pushes the due date to Oct. 15.
You can file for an extension for free online and it “takes minutes,” one tax pro said.
But you still must pay your estimated tax balance by the original due date to avoid penalties and interest.

Cavan Images | Getty Images

If you need more time for your taxes, there’s a quick, free way to file a federal tax extension online, according to experts.
This season, 1 in 4 Americans don’t feel prepared to file their taxes — and 29% admit to procrastinating — according to a January survey from IPX1031, an investment property exchange service.

Luckily, filing for a federal tax extension “takes minutes,” according to Tommy Lucas, a certified financial planner and enrolled agent at Moisand Fitzgerald Tamayo in Orlando, Florida.
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The federal tax deadline is April 15 for most taxpayers. But you have through that due date to file an extension, which pushes the deadline by six months to Oct. 15. Some taxpayers already have a federal extension due to natural disaster declarations.
Without the extension, your balance triggers the failure to file penalty, which is worth 5% of your unpaid taxes per month or partial month, capped at 25%.

However, the “extension to file is not an extension to pay,” warned CFP Sean Lovison, founder of Philadelphia-area Purpose Built Financial Services.

“An extension gives you more time to gather documents and complete your return, but taxes owed are still due by the original deadline,” said Lovison, who is also a certified public accountant.
You’ll minimize penalties and interest by paying “at least the safe harbor amount,” he said.
The safe harbor amount is at least 100% of last year’s taxes. The threshold jumps to 110% if your prior year’s adjusted gross income was $150,000 or more.

How to file a tax extension online for free

Taxpayers have a few free options to file a federal tax extension.
You can complete Form 4868 and mail it to the IRS. But experts urge filers to opt for digital options if possible.
Generally, it’s best to send information digitally to the IRS “because mail takes forever and it’s unreliable,” said Josh Youngblood, an enrolled agent and owner of The Youngblood Group, a Dallas-based tax firm.

The easiest option is selecting “extension” when making your estimated tax payment for 2023, experts say.
This processes your extension automatically and you won’t need to submit an additional form, according to the IRS.
You’ll see a confirmation immediately after submitting your estimated tax payment. But you should double-check the transaction in your IRS online account, Youngblood said.
There’s also an option to file your extension for free online via IRS Free File, a public-private partnership between the IRS and several tax software companies, regardless of your income.   

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The consumer price index rose 3.5% in March 2024, on an annual basis, according to the U.S. Bureau of Labor Statistics. That’s up from 3.2% in February.
Elevated housing inflation has kept CPI readings stubbornly high. Gasoline prices also edged up.
There are some bright spots, such as food prices, though. Household buying power is also up over the past year as wage growth has outstripped inflation.

Eric Thayer/Bloomberg via Getty Images

Inflation jumped in March as prices for consumer staples such as gasoline edged higher and those for housing remained stubbornly high, suggesting inflation may be a bit stickier than it seemed just a few months ago, economists said.
The consumer price index, a key inflation gauge, rose 3.5% in March from a year ago, the U.S. Labor Department reported Wednesday. That’s up from 3.2% in February.

CPI measures how fast prices are changing across the U.S. economy. It measures everything from fruits and vegetables to haircuts, concert tickets and household appliances.

The March inflation reading is down significantly from its 9.1% pandemic-era peak in 2022, which was the highest level since 1981. However, it remains above policymakers’ long-term target, around 2%.
Progress in the inflation fight has somewhat flatlined in recent months.
“The disinflation has stalled out,” said Mark Zandi, chief economist at Moody’s Analytics.
“The big rock in the way here is the cost of shelter,” Zandi said.

While housing costs have moderated, they account for the largest share of the CPI inflation index and “are still growing strongly,” he said.

Despite progress having stalled, broader evidence doesn’t suggest a renewed surge in inflation — though it may take longer than expected to bring the rate back to target, economists said. In fact, underlying inflation after stripping out shelter costs is already back to target, Zandi said.
“I still hold to the view that inflation is moderating,” Zandi said. “It’s just taking frustratingly long to get there.”

Household paychecks can buy more stuff, though

Higher oil and gas prices take a toll

Gasoline prices increased 1.7% from February to March, the Bureau of Labor Statistics said. This figure is adjusted to account for seasonal buying patterns.
Average U.S. pump prices were $3.52 a gallon on April 1, up from $3.35 on March 4, according to weekly data published by the Energy Information Administration.

The increase is largely attributable to higher oil prices. They’ve firmed amid a generally positive outlook for the global economy, meaning greater global oil demand, and controlled output among major oil-producing nations, meaning there hasn’t been a glut of oil, economists said.
Tensions in the Middle East may also be playing a role, Hamrick said.

Higher gas prices may filter through to higher prices elsewhere, since they factor into transportation and distribution costs for goods and even services such as food delivery, he said.
Higher energy prices are what worries Zandi most relative to inflation readings. It’s likely the upward trend will continue in coming months, and the dynamic negatively impacts consumer buying power and sentiment, he said.
“Nothing does more damage to the economy more quickly than rising oil and gasoline prices,” he said.

Other ‘notable’ areas of inflation

The BLS said that motor vehicle insurance, medical care, recreation and personal care, in addition to shelter, were “notable” contributors to “core” inflation, a reading that strips out volatile energy and food prices.
Shelter, motor vehicle insurance, medical care, apparel and personal care were notable contributors to monthly inflation from February to March, the agency said.

The overall monthly CPI reading, 0.4%, was much higher than the roughly 0.2% that would be expected on a consistent basis to bring inflation back to normal, economists said.
“There is no improvement here; we’re moving in the wrong direction,” Hamrick said.
“The usual trouble spots persist,” said Hamrick, who additionally called out costs for electricity and car maintenance and repairs.

Prices have fallen in some categories

Meanwhile, some consumer categories have seen improvement.
Prices fell for used cars and trucks, new vehicles and airline tickets between February and March, for example. They’re also down over the past year, by 2.2%, 0.1% and 7.1%, respectively, according to CPI data.
Lower prices for new and used cars should lead auto insurance and repair costs to fall as well, economists said.

Grocery prices are another bright spot, they said.
While some categories, such as eggs and pork chops, have seen recent upward movement, the overall “food at home” index stood at 0% on a monthly basis in both February and March.
“Food prices have come to a standstill,” Zandi said. “For most Americans, the thing that bothers them the most about inflation is high food prices.”

Supply-and-demand dynamics

At a high level, supply-and-demand imbalances are what trigger out-of-whack inflation.
For example, the Covid-19 pandemic disrupted supply chains for goods. Americans’ buying patterns also simultaneously shifted away from services — such as entertainment and travel — toward physical goods since they stayed at home more, driving up demand and fueling decades-high goods inflation.
Additionally, supply-and-demand dynamics in the labor market pushed wage growth to the highest level in decades, putting upward pressure on prices for services, which are more wage-sensitive.
Now that supply-chain issues are “pretty close to fixed,” there’s “little scope” for goods to contribute to disinflation moving forward, said Sarah House, senior economist at Wells Fargo Economics.

“You need services to take the mantle of disinflation,” because goods have “petered out,” she added.
Housing falls into the services category. It accounts for the largest share of the consumer price index, so disinflation in this category would likely have a large impact on inflation readings.
So far, housing inflation has remained stubbornly high — even as economists have predicted it would start moderating any day given broadly positive trends in prices for new tenant rental leases, for example.
“It seems to be taking a bit longer than people thought,” said Andrew Hunter, deputy chief U.S. economist at Capital Economics.
“It’s coming,” he said. “It’s just a matter of when.” More

Since the start of 2024, higher-than-expected inflation data triggered caution from top Federal Reserve officials.
The Fed is determined not to reduce interest rates too soon, experts say — a mistake the central bank has made in the past.
“The real danger here is that the Fed loosens prematurely, which is exactly what they did in the late 1960s,” said Mark Higgins, author of “Investing in U.S. Financial History: Understanding the Past to Forecast the Future.”

The Federal Reserve is in no rush to lower its benchmark rate.
Earlier expectations that the central bank was planning multiple cuts before the end of the year seem less likely.

On the heels of Friday’s strong jobs report, Wednesday’s consumer price index increased at a faster-than-expected pace in March. Both suggest that inflation is staying stubbornly higher, which experts say is likely keeping the Fed on the sidelines.
Now markets are pricing in a less-than 20% chance of a rate cut in June, according to the CME’s FedWatch measure of futures market pricing, down from nearly 80% one month ago.
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Since the start of 2024, higher-than-expected inflation data made top Fed officials less eager to ease policy. Chair Jerome Powell indicated last month that, with the economy still growing at a healthy pace and the unemployment rate below 4%, the Fed can take a more measured approach when it comes to cutting interest rates.
“We are prepared to maintain the current target range for the federal funds rate for longer if appropriate,” said Powell at a post-meeting news conference in March.

The risks of allowing inflation to persist still far outweighs the risk of triggering a recession.

Mark Higgins
author of “Investing in U.S. Financial History: Understanding the Past to Forecast the Future.”

“The risks of allowing inflation to persist still far outweighs the risk of triggering a recession,” Mark Higgins, senior vice president at Index Fund Advisors and author of “Investing in U.S. Financial History: Understanding the Past to Forecast the Future,” recently told CNBC.
“[The Fed’s] failure to do this in the late 1960s is one of the major factors that allowed inflation to become entrenched in the 1970s,” Higgins said.
This time around, the central bank is likely to remain extremely cautious, Higgins said, even if that means holding rates higher for longer.
“My gut is that they are aware of the risks and won’t ease too early,” he added.

The Fed’s ‘two major mistakes’

“The Fed has made two major mistakes in its history,” according to Higgins, and those two missteps still influence the central bank’s moves today.
“The first [mistake] was allowing the banking system to fail in the early 1930s, which caused the Great Depression to deepen significantly,” he said. “The second was the great inflation of the 1970s when inflationary pressures picked up and the Fed tightened but backed off prematurely, which is the risk the Fed faces now.”
While financial regulations and the creation of deposit insurance could prevent a widespread banking crisis from happening today, “the real danger here is that the Fed loosens prematurely, which is exactly what they did in the late 1960s,” Higgins said.

“Deep down, Powell is petrified of redoing Volcker again,” Steven Eisman, Neuberger Berman’s senior portfolio manager, said recently on CNBC’s “Squawk Box.”
The Fed has “engineered what looks to be a soft landing, inflation is coming down, the economy is still strong, why would you waste rate cuts now and risk a resurgence of inflation when really all you need to do is declare victory?” he said.
Even in prepared remarks last month, Powell referenced Volcker’s earlier interest rate policy as a reason policymakers don’t want to ease up too quickly now.
“Reducing policy restraint too soon or too much could result in a reversal of progress we have seen in inflation and ultimately require even tighter policy to get inflation back to two percent,” Powell said.

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YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

“Because rates shot up so much over the past few years, refinancing activity has mostly disappeared,” said Jeff Ostrowski, a housing analyst at Bankrate.
When the Federal Reserve starts cutting rates, here’s how to tell if refinancing is a smart move.

Westend61 | Westend61 | Getty Images

It’s unclear when the Federal Reserve could begin cutting interest rates, but many homeowners who took out a mortgage in recent years — as rates hovered between 6% and 7%, and even touched 8% — are paying attention for opportunities to refinance.
Thanks to those high mortgage interest rates, refinance activity in 2023 was at the lowest level in 30 years.

In the first and second quarters of 2023 there was only $75 billion and $80 billion, respectively, in mortgage refinance originations nationally, according to Freddie Mac, a government-sponsored entity that buys mortgages from banks.
“Because rates shot up so much over the past few years, refinancing activity has mostly disappeared,” said Jeff Ostrowski, a housing analyst at Bankrate.

As part of its National Financial Literacy Month efforts, CNBC will be featuring stories throughout the month dedicated to helping people manage, grow and protect their money so they can truly live ambitiously.

Refinancing activity rose 2.9% in February compared with last year, Freddie Mac found. However, fewer owners might refinance their loans as they might still be locked in on historically low rates or may see little incentive to do so, the mortgage buyer forecasts.
As homeowners wait to see when Fed rate cuts might materialize, and to what extent, here are three signs it may be smart to refinance:

1. You can cut your rate by 50 basis points or more

The right time to refinance your loan depends on when you bought your house, said Chen Zhao, a senior economist at Redfin, a real estate brokerage site.

It’s typically smart to wait for rates to go down by a full percentage point because it makes a significant difference in your mortgage, experts say.
Yet, once you start seeing rates decline by at least 50 basis points from your current rate, contact your lenders or loan officers and see if it makes sense to refinance, depending on factors including the costs, monthly savings and how long you plan to be in the home, Zhao said.
“There are costs associated with it, but the costs are low in comparison to the savings over the long term,” said Zhao.

While the outlook on Fed rate cuts continues to change, rates are unlikely to go much below 6% in the near term, Zhao said.
“We’re just in a much higher interest rate situation with the economy,” she said.
Don’t hold out for a super low rate like the ones consumers saw in the early stages of the Covid-19 pandemic.
“We’ve been so accustomed to mortgage rates as a baseline being at 2% or 3%,” said Veronica Fuentes, a certified financial planner at Northwestern Mutual. “That’s what we expect the norm to be, but that’s actually not the case.”

2. You can pay cash for closing costs

When you refinance, “it’s like doing a brand new loan all over again,” Ostrowski said.
That means you’ll incur closing costs, typically including an appraisal and title insurance.
The total cost will depend on your area or state.
The average closing cost for a refinanced single-family mortgage was $2,375 in 2021, up 3.8%, or $88, from $2,287 a year prior, according to CoreLogic’s ClosingCorp, a provider of residential real estate closing cost data.

Refinancing can make more financial sense if you are able to pay those upfront instead of rolling the expense into your new loan. Some lenders may require a higher interest rate if you finance closing costs, plus you’ll be paying interest on those expenses for the life of the mortgage.
“You have to be pretty mindful and have a good strategy for how much money you’re going to save and whether it makes sense,” Ostrowski said.

3. You bought your home with an FHA loan

If you bought your home with an FHA loan, you might have a reason to refinance. While such loans are a “great tool” for securing a home as a first-time buyer, there’s a required mortgage insurance premium, or MIP, that can be costly, said Ostrowski. Most new borrowers pay an annual MIP that is equivalent to 0.55% of their loan, according to government figures.
“If you got an FHA loan, it could make sense to refi for a rate that is only a little bit lower if you’re going to be able to knock out that mortgage insurance premium,” he said.
For example, on a $328,100 FHA mortgage, the owner would pay annual premiums at 0.55% rate for the life of the loan, equal to $150 monthly payments, according to calculations from Bankrate. More

YOUR GUIDE TO NAVIGATING YOUR FINANCIAL FUTURE

It is still uncertain when the Federal Reserve may cut rates and by how much.
But cash savers still have the best opportunity for returns than they’ve had in years.

Riska | E+ | Getty Images

It may be a while longer before the Federal Reserve lowers interest rates, experts now say.
That means savers can still earn the best returns on their cash in years, following a “nuclear winter for the better part of the last 15 years,” said Greg McBride, chief financial analyst at Bankrate.

“We’ve now had two years in a row where both liquid savings and timed deposits like CDs [certificate of deposits] are paying yields that are well ahead of inflation,” McBride said.

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The Fed has largely been expected to start a series of interest rate cuts this year after hiking rates to combat historically high inflation.
But as the economy continues to perform well and inflation is still higher than the central bank’s 2% target, predictions for how much rates will come down and when have become less certain.
“Even though rates might start dropping a bit here or there, they’re still going to be relatively high,” said Ken Tumin, senior industry analyst at Lending Tree and founder of DepositAccounts.

‘It’s a good time to lock in’

Cash savers have a variety of options in which to invest that are beating inflation, according to McBride.

“It’s a good time to lock in,” McBride said, with CDs, Treasury bills and Treasury Inflation-Protected Securities, or TIPs, all paying high rates.
Series I bonds have become a better deal, though not as many people are paying attention to them, McBride said. When I bonds were at 9.6%, they were just reimbursing savers for inflation, with no after-inflation return. Now, however, they provide an after-inflation return of 1.3% in addition to reimbursing savers for inflation, for a total of 5.27% available through April 30.
To be sure, many of the mentioned investments require savers to stay put for a specified time period, and may require some funds to be forfeited if they are cashed in early.

Online savings accounts provide higher yields

Online high yield savings accounts provide more flexible terms for accessing cash and annual percentage yields more than 4%, in many cases.
Yet 67% of Americans are earning interest rates below that threshold, according to a recent Bankrate survey.
The two top reasons respondents cited for not moving their money included wanting access to their cash through their local bank branch and being comfortable with their current financial institution.
However, savers should keep in mind they don’t necessarily have to give up branch access or completely sever ties with their current bank or credit union if they set up an account that’s linked to their existing accounts, McBride said.
“You’re just going to send your savings somewhere where it’s going to be welcomed with open arms and higher yields,” McBride said.

Consider when you need the money

When choosing between locking in returns on cash or finding a better rate on a liquid savings account, the timing of your goals should be your priority.
“The fundamental determinant is, ‘When do you need the money?'” McBride said.

Ask yourself whether you need to have access to your cash at a moment’s notice or whether you can afford to lock it up for multiple years, he said.
For investors who have ample cash, it may make sense to break up deposits among online savings accounts, short-term CDs, and even long-term CDs or Treasury notes, according to Tumin.
“No one really knows where interest rates are going to fall,” Tumin said. “So you can try to kind of hedge your bets.”
However, for savers without much savings, a high yield online savings account still makes the most sense, he said. All savers — regardless of deposit size — should make sure their deposits are insured by the Federal Deposit Insurance Corp.

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