Whether you’re tuned into the news or not, you’ve probably heard the word “tariff” thrown around a lot lately. Maybe you have a general idea of what it means — or maybe it just sounds like something that makes prices go up. Before you panic and start stockpiling goods, take a breath. Will tariffs impact your wallet? To some extent. But here’s what you really need to know.
What are tariffs and who pays them?
What tariffs are
Tariffs may sound confusing, but put simply, they’re taxes placed on goods and services imported from one country to another. Tariffs can serve a few purposes, but one of the main goals is to make imported items more expensive — making locally produced goods more competitive by comparison.
Who pays the tariff costs?
The burden of tariffs usually falls on the exporting companies, businesses and consumers. Businesses typically absorb some of the cost and pass the rest on to consumer—like a hidden surcharge on your purchase. But even if an item is made in the U.S., it may still rely on imported materials, meaning manufacturers could raise prices to cover those added costs. Some companies, for example, have responded to recent tariffs by adding a flat $5 fee surcharge to cover the tariff costs.
Will tariffs impact your savings?
It might be a stretch to say tariffs will directly hit your savings — but it’s not entirely off base. Tariffs can’t affect what you already have in the bank, but they can drive up the cost of goods, which can affect how much you spend and how much you’re able to set aside for savings.
Do tariffs impact interest rates?
Tariffs don’t directly impact interest rates, but they can influence them depending on how they affect manufacturing and consumption.
According to Shelby McFaddin, investment analyst at Motley Fool Asset Management, if tariffs put enough strain on the economy — slowing down manufacturing and reducing consumer spending — it could lead to rising unemployment. When that happens, the Federal Reserve has to consider its dual mandate: keeping prices stable and supporting maximum employment. If the economy weakens enough, the Fed may respond by lowering interest rates to stimulate growth.
So, while tariffs don’t automatically change interest rates, they can trigger economic shifts that lead the Fed to adjust them.
But despite high-yield savings rates dropping since the Federal Reserve began cutting rates late 2024, many accounts are still offering returns well above 4% — which is pretty solid for just letting your money sit there.
The LendingClub LevelUp Savings Account, for example, offers a solid APY and it comes with no minimum balance or monthly fees. The Western Alliance Bank High-Yield Savings Account also offers an attractive rate with just a $1 minimum deposit and no monthly fee requirements.
LendingClub LevelUp Savings Account
LendingClub Bank, N.A., Member FDIC
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Annual Percentage Yield (APY)
4.40% (with monthly deposits of at least $250), or 3.40%
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Minimum balance
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Monthly fee
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Maximum transactions
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Excessive transactions fee
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Overdraft fees
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Offer checking account?
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Offer ATM card?
Pros
- Strong APY
- No minimum balance required
- No monthly fees
- Free ATM card and no ATM fees
Cons
- At least a $250 monthly deposit required to earn the highest APY
- No physical branch locations
Western Alliance Bank High-Yield Savings Account
Western Alliance Bank is a Member FDIC.
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Annual Percentage Yield (APY)
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Minimum balance
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Monthly fee
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Maximum transactions
Up to 6 transactions each month
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Excessive transactions fee
The bank may charge fees for non-sufficient funds
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Overdraft fee
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Offer checking account?
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Offer ATM card?
Pros
- Strong APY
- Low minimum deposit required
- No monthly fees
Cons
- Bank may charge non-sufficient funds
- Doesn’t offer checking account or ATM access
- Accounts are opened and managed on Raisin.com
How can you prepare for tariffs?
Tariffs can feel overwhelming because their impact isn’t always immediate or predictable, but the best thing you can do is not panic. While there’s still no telling exactly how things will play out, if you want to make sure your finances are in a solid place — and that you’re prepared at home — there are a few practical steps you can take now.
Look at your budget
When tariffs hit, your everyday expenses can quietly creep up — making it all the more important to revisit your budget and know exactly where your money’s going.
You Need a Budget (YNAB)
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Cost
34-day free trial then $109 per year ($9.08 per month) or $14.99 per month (college students who provide proof of enrollment get 12 months free)
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Standout features
Instead of using traditional budgeting buckets, users allocate every dollar they earn to something (known as the “zero-based budgeting system” where no dollar is unaccounted for). Every dollar is assigned a “job,” whether it’s to go toward bills, savings, investments, etc.
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Categorizes your expenses
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Links to accounts
Yes, bank and credit cards
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Availability
Offered in both the App Store (for iOS) and on Google Play (for Android)
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Security features
Encrypted data, accredited data centers, third-party audits and more
Pros
- Offers a 34-day free trial, and college students get 12 months free
- Designed to help you get out of debt
- YNAB website claims average user saves $600 in their first two months and $6,000 in their first year
- Syncs to your bank accounts and credit cards
- Users can set goals, customize spending categories
- Offers educational resources, such as budgeting advice and free, live workshops
- Personal customer support
- Security features include encrypted data, accredited data centers, third-party audits and more
Cons
- Costs $109 per year or $14.99 per month
- Customer reviews note that it takes longer to set up than other apps
Goodbudget
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Cost
Free for 20 total envelopes; $10/month (or $80/year) for unlimited envelopes
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Standout features
Allows couples to use the envelope system digitally for budgeting, and allows couples to track their debt
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Categorizes your expenses
Yes, but users must manually input transactions since the app does not sync to your bank account
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Links to accounts
No, users must manually input purchases and transactions
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Availability
Offered in both the App Store (for iOS) and on Google Play (for Android) and as a version for laptops
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Security features
Information is using bank-grade 256-bit SSL
Pros
- Free version of the app
- Helps couples manage their money together, track spending and track debt
- Ability to share budget with your partner
- Digital envelopes help couples save for big goals that matter to them
- Money management courses and resources available
Cons
- Can’t connect bank accounts so users must manually enter transactions
Avoid “panic buying”
While you might also see advice encouraging you to stock up on things before prices rise or goods run out, that can quickly turn into “panic buying,” which results in spending on things you don’t need or won’t use. Instead, McFaddin recommends starting simple and thinking practically about your actual needs.
“In our house, we thought about things that would be really inconvenient if we couldn’t get them for a week or two,” she says. “For those things, we basically said, ‘do we have some already? Let’s get one more package’.”
Avoid dipping into investments
Lastly, be cautious when it comes to your investments. If you’re feeling financially strained, reducing your contributions slightly might be a better route than dipping into your accounts. Just be sure to move carefully and with intention by taking time to review your options, understand the long-term impact and avoid making impulsive decisions out of stress or fear.
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Meet our experts
At CNBC Select, we work with experts who have specialized knowledge and authority based on relevant training and/or experience. For this story, we interviewed Shelby McFaddin, investment analyst at Motley Fool Asset Management.
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At CNBC Select, our mission is to provide our readers with high-quality service journalism and comprehensive consumer advice so they can make informed decisions with their money. Every personal finance article is based on rigorous reporting by our team of expert writers and editors with extensive knowledge of personal finance products. While CNBC Select earns a commission from affiliate partners on many offers and links, we create all our content without input from our commercial team or any outside third parties, and we pride ourselves on our journalistic standards and ethics.
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