If you have any cash that you don't need to cover your living expenses or pay off debt, a savings account is one of the best places to store it right now. Market interest rates have risen substantially in the past two years as the Federal Reserve raised the federal funds rate to control inflation.

And while those rate increases aren’t so great for borrowers, it’s "an opportunity for savers to lock in higher returns on their cash investments," said Michael Collins, a chartered financial analyst and a professor at Endicott College in Massachusetts.

Some financial institutions — typically online banks — are offering interest rates as high as 5% APY for high-yield savings accounts.

However, Collins said, "this window of opportunity won’t last forever."

In September, the Fed decided to cut its benchmark rate, and then again in November. As a result, savings account rates have started dropping. Here’s why you should take advantage of the highest rates we’ve seen in years.

Who should put money in a savings account?

If you’re employed and haven’t built an emergency savings fund, it’s a good time to make this your priority. Many personal finance experts recommend saving three to six months’ worth of expenses. So if you typically spend $3,000 a month on basic living expenses, for example, you might aim to save between $9,000 and $18,000. You may also decide to open a savings account if you have other short-term goals to save for, such as an upcoming vacation.

A high-yield savings account is a good place to store these funds because they’re readily accessible. And with interest rates at their highest level in years, you’ll maximize your savings without sacrificing liquidity.

However, rates have recently peaked and are now on the decline. If you think there’s a chance that rates will continue dropping, you may consider putting your money in a certificate of deposit to lock in the higher rate.

Who should chase higher rates?

Interest rates on savings accounts can change anytime, so it’s a good idea to check how much you’re earning and shop around for the best available rate. There’s no penalty for moving money between accounts, so you might consider opening a new savings account if it offers a much higher rate. But first, check whether you have enough cash to meet any minimum balance requirements.

Next, think about how you use the account. If you regularly withdraw cash from it throughout the year, chasing a higher annual percentage yield (APY) — how the return on your savings is expressed — may not make sense. The money in your account may not grow much, and you may decide convenience is more important than getting the best rate out there.

When to put your money elsewhere

If you have a nice financial cushion for emergencies and don’t have any short-term goals to save for, you may want to focus on longer-term growth.

Regularly investing in the stock market, for instance, can help you build wealth over time. A common strategy is dollar-cost averaging, in which you put a set amount of money into a diversified portfolio at regular intervals. You’ll naturally buy more shares when stock prices are low and fewer when they’re high. Over time, the highs and lows average out.

What type of savings account should I open?

There are several types of accounts to choose from, including high-yield savings accounts, standard savings accounts, money market accounts, and certificates of deposit, or CDs. The best savings account for you depends on when you’ll need the cash, how often you want to deposit money, and whether you’re willing to risk falling rates.

Savings accounts

Savings accounts allow you to deposit money anytime, though your bank can restrict the number of monthly withdrawals. High-yield savings accounts work much like standard savings accounts, but you earn more interest on your balance.

With both types of accounts, you’ll receive money in the form of compound interest, which means you earn money on your principal and on interest already earned. Savings accounts usually come with one APY that applies to the entire balance instead of a set of tiered rates, which change based on how much money is in your account.

Money market accounts

Money market accounts work like savings accounts: You can deposit money at any time, but you may be limited to a certain number of monthly withdrawals. MMAs usually have tiered interest rates that pay a higher yield for larger balances. These accounts may be a good option if your balance is large enough to receive the higher rate and you don’t have plans to use your savings.

Certificates of deposit

Certificates of deposit earn interest at a fixed rate over a set period of time. Once you fund the account, you typically can’t make additional deposits. Withdrawing from the account ahead of its maturity date usually results in an early withdrawal penalty. This type of savings account may be best if you’re worried about market rates dropping. If you don’t need access to your cash during the CD term, you can lock in your rate for months or years.

How to find the best savings rates

Start your search online

Online banks — many of which are not banks but "neobanks" — typically offer higher interest rates on savings accounts than their brick-and-mortar counterparts. With lower overhead costs, these banks can pass savings to their customers through higher APYs. Some of the top online savings accounts offer APYs as high as 13 times the national average. However, you’ll need to consider whether you’re comfortable managing the account online and limiting your customer service options.

Beware fees and balance minimums

The best high-yield savings accounts come with no additional fees or account minimums. But some require you to keep a certain amount of money in the account or pay a monthly fee to earn the highest yield. These costs can eat into your savings if you can't maintain the minimum. For instance, let’s say you put $3,000 into an account with a 4% APY and a monthly account fee of $10 if your balance falls below that level. If you made a $100 withdrawal in the first month you had the account, after a year, you’d earn about $122 — but you'd also pay $120 in monthly fees, which would wipe out almost all your earnings.

Consider whether the rate will change

Banks and credit unions can change interest rates at any time. This typically happens when the Federal Reserve raises or lowers its benchmark interest rate. If your bank or credit union changes the rate on your savings account, you’ll keep any interest you’ve already received and earn interest at the new rate going forward.

Rates may also change if your account comes with tiered rates, which pay a different yield based on the balance in your account. For example, your rate may decrease if you withdraw money and your balance falls below a certain threshold.