Pretty much everyone knows the Fed raised interest rates a half a point in early May, but what does that really mean? For the most part, the Fed has been planning to inch up rates in order to deal with record inflation, which means it hopes to stem the rise in prices we’re seeing on nearly everything we buy today, from groceries to household supplies.
Rising interest rates also mean you could earn a higher return on your savings, whether you bank with a traditional institution or you park your savings in an online bank.
Unfortunately, there’s another side to rising rates — borrowing money is going to become a lot more expensive than it was in previous years.