Lower interest rates are looming, so what does that mean for my money? As we consider the impact, we’ll look first at what it means for BORROWERS.

Whether you’re looking to purchase a home, car, or other items through credit cards, interest rate cuts could mean lower rates for big purchases.
Variable interest rates on credit cards and home equity lines could also come down, which can help ease the debt on consumers.

Next, what does change on the economic horizon mean for SAVERS?

Interest rates on “high-yield” savings and money market accounts could also come down, making those investments less lucrative.
Rates could also fall on shorter-term fixed-rate investments, including CDs and bonds, making them less attractive.
At this time, certificates of deposit still offer interest rates of five percent or better, so consider locking in a higher interest rate now.

And let’s wrap up with how lessening interest rates impact INVESTORS. It’s notable that stock prices have started to soar in response to rate-cut news. In this environment, there are several moves to consider:

Higher earnings on “high-yield” savings and money market accounts is probably short lived, so consider taking advantage of current higher rates now.
For longer-term alternatives, consider investment-grade bonds with a duration of four to 10 years to lock in higher rates beyond the next few months.
When interest rates decline, stocks that pay dividends often become more attractive because of better yields, so consider a dividend-focused ETF
For stocks, the general rule of thumb says to avoid buying high if possible. Small-cap stocks and shares in companies with smaller market capitalization remain near historically cheaper levels, so that is an investment option to consider.