October 26, 2025
Welcome Back,
Hi {{rh_partner_name | there}}
Good morning! In today’s issue, we’ll dig into the all of the latest moves and highlight what they mean for you right now. Along the way, you’ll find insights you can put to work immediately
— Ryan Rincon, Founder at The Wealth Wagon Inc.
Today’s Post
How Interest Rates Affect Your Money: Savings, Loans & What to Do
When you hear people talk about “interest rates,” you might tune them out. But they quietly shape a lot of what you do with your money — from how much you earn on a savings account to how much you pay on a loan. Let’s walk through it in plain terms, figure out what’s going on now, and explore what it means for you.
1. What are interest rates, really?
Think of an interest rate as the “price” of money. If you borrow money, you pay extra (interest). If you save money, you may earn extra (interest).
The central bank in the U.S. — the Federal Reserve (Fed) — sets a key rate called the “federal funds rate.” That rate influences nearly everything else: the rate banks charge, the rate you get. Currently it’s around 4.25%.
When the Fed raises rates, borrowing tends to get more expensive, but you might earn more when you save. When the Fed lowers rates, borrowing gets cheaper, but savings earn less.
2. What’s happening right now (2025)?
The Fed recently cut its target rate by 0.25% (25 basis points) because job growth has slowed and the economy is bumping into complications.
Because of that, many large U.S. banks have lowered their “prime rate” (which affects loans like credit cards and business borrowing) from 7.50% to 7.25%.
On the savings side: many banks still offer very low interest on basic savings or checking accounts (e.g., 0.01% in some cases) even when the Fed rate is higher.
The mismatch: you may earn very little on savings, while rates for borrowing are still high — thanks to banks’ practices and market lag.
3. Why this matters for you
Here are three big reasons you care:
Savings growth suffers. If you keep money in an account earning 0.01% when inflation is say 3%, your money is losing purchasing power over time.
Loans cost more. If you need to borrow (car loan, credit card, mortgage), high interest means higher monthly payments, more total cost.
Opportunity cost. With the rates shifting, you might miss out on better savings or investment decisions if you don’t pay attention.
4. What you can do about it
Here’s a short checklist (and some ideas) to make smart moves:
Shop for high-yield savings accounts. Don’t settle for “regular” bank savings that pay almost nothing. Some online banks offer significantly higher APYs. (Always check FDIC insurance.)
Consider locking in a rate if you must borrow. If you’re taking a big loan and you expect rates to rise, a fixed-rate loan might protect you. On the flip side: if you have a variable/adjustable rate, watch the terms closely.
Use the “time value of money” to your advantage. A dollar saved today is worth more than a dollar saved tomorrow — because it can earn interest.
Avoid “just wait” thinking. If rates are set to change (up or down) you don’t want to still be stuck making decisions tomorrow you could’ve done today.
Balance your savings vs. investing. If savings rates are low, and you’re willing to take more risk and wait longer, you might consider investing in assets that historically beat inflation (stocks, bonds, etc.). But always know your risk.
5. Quick example to illustrate
Imagine you have $10,000 to put aside.
Option A: Basic savings account earning 0.05% — in a year you’ll make about $5.
Option B: High-yield savings or online bank earning say 3% — you earn about $300 in a year.
Big difference, right? Then if you borrow $20,000 at 7% interest instead of 5% because the rate jumped — you’ll pay hundreds more every year. Rates matter.
6. Final thoughts
Rates are heart-and-soul to personal finance. They affect how fast your money works for you (or against you). The key: stay alert, don’t accept defaults, and pick actions that put you in control.
“The best time to plant a tree was 20 years ago. The second-best time is now.”
Same with smart money moves. If you’ve been waiting for perfect timing with rates, the smarter move might just be: act now with what you can control
That’s All For Today
I hope you enjoyed today’s issue of The Wealth Wagon. If you have any questions regarding today’s issue or future issues feel free to reply to this email and we will get back to you as soon as possible. Come back tomorrow for another great post. I hope to see you. 🤙
— Ryan Rincon, CEO and Founder at The Wealth Wagon Inc.
Disclaimer: This newsletter is for informational and educational purposes only and reflects the opinions of its editors and contributors. The content provided, including but not limited to real estate tips, stock market insights, business marketing strategies, and startup advice, is shared for general guidance and does not constitute financial, investment, real estate, legal, or business advice. We do not guarantee the accuracy, completeness, or reliability of any information provided. Past performance is not indicative of future results. All investment, real estate, and business decisions involve inherent risks, and readers are encouraged to perform their own due diligence and consult with qualified professionals before taking any action. This newsletter does not establish a fiduciary, advisory, or professional relationship between the publishers and readers.