Savers can still earn yields on deposit accounts that are outpacing inflation, even as some yields have decreased recently as banks anticipate a likely Federal Reserve rate cut in September. One such option is a new savings account from LendingClub, which launched in mid-August.

But unlike most savings accounts at online-only banks, this account isn’t necessarily for everyone, since you need to deposit $250 per month to earn the top-tier annual percentage yield (APY) — especially savers who choose to set-and-forget a lump sum of money in a savings account. Here’s what you need to know about LendingClub’s new LevelUp Savings account.

LendingClub “levels up” new savings account

LendingClub’s LevelUp Savings account, which launched Aug. 21, is a high-yield savings account that offers a competitive yield of 5.30 percent APY — but to qualify for that APY, you must deposit $250 per month. If not, you get bumped down to a “standard rate” of 4.80 percent APY.

This type of account could motivate savers to keep adding to their savings. However, some might view this as a chore, or simply a monthly amount that’s not feasible. Of course, you could also open up another savings account with a competitive yield and have a certain amount of your direct deposit go into that high-yield savings account each paycheck.

For consumers who don’t feel they can sock away $250 a month, there are plenty of other high-yielding options available at online-only banks that are federally insured by the Federal Deposit Insurance Corp. (FDIC) and credit unions insured by the National Credit Union Administration (NCUA).

For example, LendingClub’s new LevelUp savings account is similar to the approach taken by the Savings Builder account from CIT Bank. In order to earn the highest APY on that account, you’ll need to make either at least a $100 deposit each month or have at least $25,000 deposited in the account.

Banks might have this requirement of a monthly deposit so that they know you’ll either be depositing that amount of money or earning a lower APY if you don’t make that monthly deposit.

What you should know about LendingClub’s LevelUp Savings Account

LendingClub is currently offering a 5.30% APY on the LevelUp savings account for account owners who deposit at least $250 cumulatively during the previous statement cycle. Since it’s a cumulative $250, this means you don’t have to deposit this amount all at once, but you can break it up over the period.

If you miss a month of saving this amount, you’ll still earn the standard rate of 4.80% the next month, which is still significantly higher than the national average. Keep in mind that interest payments, account bonuses or credits and any reversals or refunds do not count toward this $250 requirement.

There is no minimum balance or minimum deposit required to open this account. There is also no monthly maintenance fee. If you want access to your money fast, you can also request an ATM card. Since LendingClub is an Federal Deposit Insurance Corp. (FDIC) insured institution, deposits up to $250,000 are insured.

Keep a close eye on your savings APY

With banks likely to lower savings yields in the near future, or products changing, it’s important to know whether you’re still in a competitive account since the rate environment is likely to change.

It’s also important to know that unlike a certificate of deposit (CD), there generally aren’t guarantees when it comes to savings account APYs. They’re usually variable, as opposed to fixed, which means a bank or credit union can decrease them at any time. (Introductory APYs are the exception to this rule. But with rates expected to decrease in the near future, you might have trouble finding an intro APY with a competitive yield currently.)

Consider a CD

Those who don’t want their APY to decrease and definitely won’t need their funds during the CD’s term should consider a CD in this likely declining rate environment.

Top CD yields generally peaked in the fourth quarter of last year, and some CD yields have declined since then. But CD many yields are still potentially outpacing the current rate of inflation and the Fed’s 2 percent inflation target. Of course, as we learned in 2022, inflation could always rise to much higher levels – like when it reached 9.1 percent in June 2022.

A no-penalty CD could be a great happy medium for those unsure about whether they’ll need the funds but who still want a fixed APY.

Bottom line

Rates are likely to decrease. But as long as they stay ahead of inflation, it’s a great time for savers. But, if you haven’t already, you need to make the switch to a high-yielding account. If your money is in a non-interest bearing account or earning 0.01 percent APY, you’re missing out.

Because it’s predicted that rates will decrease , a CD that’s still earning a high yield now is worth considering for any money that you won’t need during its term and that shouldn’t be used for another purpose — such as an investment or paying off high-interest debt. Generally, it’s a good idea to have an emergency fund in place before opening a CD.