The Federal Reserve has voted to cut the federal funds rate to a range of 1.75 percent to 2 percent. What does that mean for you? Well, the federal funds rate is the benchmark rate banks use to determine rates on savings and loans. Knowing that, there are certain things you should do and not do. We’ve sorted that out below.
What to Do
Get Better Savings Rates. Even with the Fed rate getting cut, if you’re not earning a good return on savings, it’s time to shop around. Many online banks and credit unions are offering rates of around 2 percent. Consider those instead of a big bank.
Refinance Loans. As HerMoney reports, it’s a good time to think about refinancing your auto loan or mortgage. Auto loan refinancing is fairly simple, while mortgage refinancing is a bit more complex. However, now is the time to take advantage of lower rates. Doing so could save you plenty.
What Not to Do
Freak out about investments. The Fed rate cut sent stocks tumbling the day it happened, but you’d be wise to remain calm. The markets might be volatile, but stick to your long-term retirement savings plan. The market rewards patience.
Ignore Your Credit. No matter what the Fed does, if you don’t have a good credit score, you’re hurting yourself. The better your credit score, the better rates you’ll be offered on things like credit cards, personal loans and mortgages. Now is not the time to forget this. Be vigilant with your credit score regardless overall economy.