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Inflation makes your money worth less over time, reducing its purchasing power. Using a high-yield savings account (HYSA) can mitigate inflation’s negative effects even if it doesn't always outperform inflation over long periods.
Both inflation and HYSA annual percentage yields (APYs) are rates of change. The inflation rate measures how much prices increase in the economy, while HYSA rates show how much your money can grow in a high-yield savings account.
Here’s a look at the inflation rate over time compared to the APYs of high-yield savings accounts, and what strategies to consider if you’re not keeping up with inflation.
Rate Tracker: Inflation vs. average high-yield savings APY
We compared inflation to the average HYSA rate on NerdWallet’s list of the best high-yield savings accounts from May 2023 to April 2026.
Key takeaways:
- Over the past three years, the average HYSA rate was mostly higher than inflation.
- High-yield rates don’t always keep up with inflation. In April, the inflation rate was 3.80%, compared to an average HYSA APY of 3.71%.
Inflation vs. specific high-yield rates
Here’s a closer look at three high-yield savings accounts and the national average savings rate compared to inflation over a three-year period. Despite some high-yield accounts dropping below the inflation rate, their rates are more effective at reducing inflation’s effect on your savings than the national average rate.
High-yield savings accounts can have interest rates that are 10 times the national average. The current national average rate is 0.38%. Higher savings rates can occur during times of high inflation: When the Federal Reserve raises the federal funds rate to combat inflation, banks often respond by increasing rates on savings accounts and CDs, though changes vary by institution. The Fed’s rate has remained elevated since mid-2022. HYSA APYs have been high during that same period.
» Read more: What is a high-yield savings account?
How inflation cuts into your savings return
Inflation and your high-yield savings rate affect your savings’ value in opposite ways over time. The high-yield rate boosts the value and inflation lowers it. A simple way to see how both work is to calculate the real rate of return on your savings. Here’s the simplified calculation:
Rate of return - inflation rate = real rate of return
For example, take a 4% APY on a savings account and subtract an inflation rate of 3%, which results in a 1% real rate of return. Keep in mind that interest earned in savings accounts is taxable, which can reduce your after-tax real return. High-yield accounts can have rates lower than inflation, which means a real rate of return can be negative.
Inflation fluctuates, and it’s better to focus on what you can control as you save over time rather than changing strategies based on monthly inflation figures.
Tips to lessen inflation’s impact on your savings
- Open a high-yield savings account if you don’t have one. These accounts are generally available at online-only banks and other financial services providers. They usually have no monthly fees or ongoing balance requirements.
- Lock in a rate with a certificate of deposit, or CD. A CD is a type of savings account limited to a set period, generally from three months to five years. Its key advantage is a fixed rate, which can be a way to lock in returns above inflation. The best CD rates can be above what high-yield savings accounts offer. A CD is best for short-term savings you can set aside, since early withdrawal penalties apply.
- Build a CD ladder. This savings strategy involves opening multiple CDs to take advantage of the flexibility of short-term CDs and the typically higher returns of long-term CDs.
- Consider inflation-adjusted investments. Typically savings accounts and CDs are part of your short-term savings strategies, in which FDIC insurance and access to funds now or within five years are key. Long-term savings, such as for retirement, tend to be invested in stocks and bonds. During high inflationary periods, risk-averse savers, especially in retirement, may explore certain types of bonds tailored to inflation. For example, I bonds and Treasury Inflation Protected Securities, or TIPS, have their earnings adjusted for inflation.
Methodology
- For inflation data: We used a standard measure of inflation, the consumer price index (CPI), to reflect overall spending cost increases for consumers. This measures year-over-year percentage changes to the CPI each month for urban consumers across all items, including food and energy. The percentage changes compare a month this year to the same month last year. Core CPI, a different inflation metric using the same index, measures inflation without food or energy.
- For NerdWallet savings rate data: The average APY for a high-yield savings account on NerdWallet is based on our list of the best high-yield savings accounts. For the average high-yield APY and specific banks’ APYs, we used APY data we collected on the 23rd day of each month, or the closest weekday.
- For national average data: We used figures from the Federal Deposit Insurance Corp.
