(MONEY Magazine) – What's New

The Federal Reserve has raised short-term interest rates another quarter point to 2.75%, the seventh rate hike in a year. Rates on credit cards have climbed as well, up 1½ percentage points so far. But savings rates have been slow to react, rising just one-tenth of a percentage point.

• If you carry a credit-card balance, take advantage of 0% balance-transfer offers to chip away at that high-and rising-rate debt. • Open a Web-based savings account... Internet banks now offer 3% yields with little or no minimum-deposit requirements. • ...Or transfer savings to money-market funds, which adjust more quickly to rate changes than most bank savings accounts. • Opt for short-term CDs of six months or less so that you can reinvest your savings at even higher rates later this year.

Analysts expect the federal funds rate to hit 3.5% to 4% by year-end. Credit-card rates should respond quickly; savings rates will lag.

SAVINGS NOTES AND SOURCES: CD and money-market account data as of March 15 from 100 Highest Yields ($124 for 52 issues; 800-327-7717). Tax-exempt and taxable money-market fund data as of March 15 from Money Fund Report (imoneynet.com); all have a minimum investment of $10,000 or less and assets of $25 million or more. Bond fund data as of Jan. 31 from Lipper; all are medium- and high-quality funds with average maturities of three years or less. [1] Manager absorbed all or some operating expenses. [2] Maximum 2.25% front-end load on investments under $250,000. CREDIT NOTES AND SOURCES: All rates are subject to change. Credit-card rates are for standard cards as of March 15 from Bankrate.com and are variable unless otherwise indicated. Survey does not include Internet-only cards or AmEx Blue. [1] Fixed rate. [2] Visa only. [3] MasterCard only. [4] Platinum and gold cards.