The Fed may raise interest rates this week. Here's where you should keep your money if that happens.

At a nearly 90% likelihood as of Monday, the Federal Reserve is poised to issue its first interest rate hike since 2023 when it wraps its next meeting on September 16. According to the CME Group's FedWatch tool, there's a significant chance that the central bank will increase its benchmark interest rate by 25 basis points to a range between 3.75% and 4.00%. That will further push affordable borrowing options out of reach for those looking to buy a home, refinance their current one or use a personal loan or credit card. It can, however, be a boost for savers who know how to take advantage of a once-again rising interest rate environment.

They won't be able to do so by keeping their funds in a traditional savings account, however. With an average interest rate of 0.38% there, savers not only aren't keeping pace with inflation, which has stalled above the Fed's goal as of the most recent reporting, but they're essentially leaving interest earnings unclaimed by not leveraging alternative account types instead. With a Fed rate hike looming, then, where should these savers actually consider moving their money to? Below, we'll outline three specific, lucrative account types to consider.

Start by seeing how much interest you could be earning with a CD account here.

Where you should keep your money if the Fed raises interest rates

The following three savings account types merit serious consideration now that the Fed is set to raise rates again. These can work in conjunction with each other or individually, but all three offer viable ways for savers to earn more on their money right away:

A certificate of deposit (CD) account

With interest rates here as high as 4.50% right now, or roughly 1,000% more profitable than a traditional savings account, CDs are worth serious consideration now. CD rates may rise slightly if the Fed does proceed with a hike this month, making them even more profitable accounts than they already are. 

CD interest rates are fixed, too, meaning that you'll be able to budget with precision by knowing exactly how much you'll earn once the account has matured. Still, it's important to only deposit an amount you can see through to the maturity date. Withdraw it prematurely and you'll get stuck paying a costly early withdrawal penalty that could bring you right back to where you started.

Learn more about your CD account options now.

A high-yield savings account

If you want to earn an interest rate over 4% now and want to be positioned to exploit additional Fed rate hikes ahead, a high-yield savings account could be worth opening. While rates here may be slightly below the top CD ones now, that dynamic could change as the high-yield savings account employs variable rates that will be responsive to market conditions and Fed adjustments. 

The CD rate, however, will remain fixed no matter what happens. In other words, if you want to maintain accessibility and want to be in a position to earn potentially higher interest rates in the future, a high-yield savings account could be the right choice right now.

A money market account

A money market account generally comes with the lowest interest rate of these three options, topping out at or right below 4% currently. But that rate is also variable and likely to increase in the days and weeks ahead. And the account offers something that the other two on this list do not – the ability to write checks, too, thus streamlining your banking needs with a single account. 

If you want to earn one of today's top rates, then, want to take advantage of other rate hikes ahead and want to do so without toggling back and forth among multiple account types, a money market account could be the right one for you.

The bottom line

An interest rate environment that's heating up again will need to be approached strategically by both savers and borrowers. For the former type, that means taking advantage with select savings vehicles like CDs, high-yield savings and money market accounts. Just be sure to shop around before opening one or more of these accounts. Different banks will offer different rates and you can improve your chances of finding the most profitable option by reviewing accounts via an online marketplace that will list all of the relevant information you need to complete an informed analysis.