3 critical mistakes every saver should avoid this July

The start of the new month is often a good time for savers to re-evaluate their financial strategies. What may have been working in the preceding weeks and months may no longer be applicable, and new, better strategies may be worth consideration. This is especially true in the economic climate savers find themselves in now as they head into the summer months. With inflation surging again, an interest rate hike possible and stock market performance uneven, your savings approach is more important than usual.

While there are certain moves to make against this backdrop, it’s equally important to know what not to do. Keeping your money in a traditional savings account with an average rate of just 0.38% when there are multiple account options offering rates exponentially higher, for example, is a major one to circumvent. But it’s not the only one. This July, there are actually multiple critical mistakes for every saver to avoid making. Below, we’ll examine three others worth clearly understanding right now.

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3 critical mistakes every saver should avoid this July

To vastly improve their chances of financial success (not to mention profitability), savers should specifically avoid making these three critical mistakes this month:

Rush to lock in their first high-rate offer

In a different interest rate climate, it makes sense to rush to lock in a high-rate offer, especially if a Federal Reserve rate cut is looming. So, for example, if you were offered an above-average rate with a certificate of deposit (CD) account, locking it in before the rate climate cooled made sense. But that’s not the atmosphere savers find themselves in this June. Not only are today’s elevated rates on pause, but there’s even talk of a potential rate hike in the future. 

In this climate, then, rushing to lock in the first high-rate offer you see listed online could prove to be a costly mistake. Instead, use this lull in interest rate movement to your advantage by thoroughly researching all lenders and offers to see which one is truly offering the most competitive option.

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Failing to pay attention to some critical dates

The next inflation report from the Bureau of Labor Statistics will be released on July 14. The next Federal Reserve meeting, meanwhile, will be held on July 28 and July 29. Savers should keep an eye on these dates, then, for an opportunity to secure above-average rates on their savings account options. 

Banks and lending institutions may respond to the inflation report or the Fed’s meeting by raising their offers to savers, strategic ones of whom will be ready and willing to open an account when that actually happens. In other words, failing to pay attention to some critical dates on the July calendar is a potentially costly mistake worth avoiding as rates on CDs, high-yield savings and money market accounts all may increase slightly on these days.

Not shopping around for rates and banks

There won’t be a uniform interpretation of the interest rate climate this July among banks. So it makes sense to shop around for rates and banks before committing to any. Some banks may interpret the inflation report and Fed meeting as reasons to increase their rate offers while others may want to hold firm or reduce their rates slightly. 

By thoroughly researching your options, however, you’ll be able to establish a baseline of rates and institutions to compare against and, in theory, find the right rate and account that works for your financial situation. Failure to shop around, however, could mean leaving interest earnings on the table that you otherwise would have secured with a bit more time and diligence.

The bottom line

The interest rate climate is still advantageous for savers heading into July. To make it work best for their needs and goals, however, they should do their best to avoid making these three critical mistakes. That said, don’t make perfection the goal, either. With interest rates still elevated and multiple profitable accounts to choose from, savers should carefully explore their options and then look to get started as soon as they make a decision, allowing them to earn more on their money before August rolls around.