As the Federal Reserve hiked interest rates through 2022-2023, rates on high-yield savings accounts and CDs rose in tandem. But since the Federal Reserve began holding interest rates steady (which it did at a fifth consecutive meeting in March), savings rates have started to fall. If the Fed cuts interest rates later this year, as expected, savings rates will likely drop even further.As rates continue to go down, consider locking in rates while they're still high.
To combat inflation, the Federal Reserve hiked interest rates in an attempt to drive spending down, as consumers realized higher commercial interest rates on mortgages, credit card APRs and other loans. There was a silver lining, however — as the federal funds rate increased, interest rates on high-yield savings accounts and CDs did too, as is typical. Offering a high APY (annual percentage yield) on accounts is an effective way for banks to compete for customers and attract deposits.
But at its latest meeting, the Federal Reserve decided to once again keep the federal funds rate steady. This fifth consecutive pause in rate hikes means the federal funds rate, a key bank lending rate, will remain at a target range of 5.25% to 5.5%, the highest it’s been in 23 years.
In the official statement, The Federal Reserve stated: "The Committee does not expect it will be appropriate to reduce the target range until it has gained greater confidence that inflation is moving sustainably toward 2 percent."
However, the Federal Reserve maintains their projection that there will be three interest rate cuts in 2024, reducing the federal funds rate to a range of 4.5% to 4.75%.
Our new comparison tool — in partnership with Bankrate — will help you find the best rates available now.
How to find the best savings rates
Compare high yield rates online: Online banks typically offer more generous APYs on savings accounts, so banking online could help you get the best savings rate possible. So, changing from your traditional savings account at a brick-and-mortar bank to an online one might be a good option.
Avoid teaser rates and tiered interest rates: Teaser rates are promotional rates banks use to attract new customers, but these rates are typically short-lived. Tiered interest rates pay a different yield based on the balance in your account, but if you plan on using your savings at some point, opting for an account with a flat APY is likely a better choice.
Take into account any fees: While high-yield savings accounts do offer higher than average APY on deposits, some have strings attached. Some high-yield accounts will have fees or balance requirements that could potentially decrease their overall value, so it's important to consider this to find the best options.
Here are some of the best high yield savings accounts.
Poppy Bank: 5.50% APY; $1,000 minimum opening deposit
My Banking Direct: 5.35% APY; $500 minimum opening deposit
Ivy Bank: 5.30% APY; $2,500 minimum opening deposit
TAB Bank: 5.27% APY; $0 minimum opening deposit
UFB Direct: 5.25% APY; $0 minimum opening deposit
Newtek Bank: 5.25% APY; $0 minimum opening deposit
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FAQs
Since the beginning of 2022, the national savings interest rate has increased nearly eightfold—from 0.06% to 0.47%. However, savings rates have recently stabilized, and they may start falling at some point in 2024. The Federal Reserve has stated it will likely cut interest rates before the end of the year.
Are CD rates expected to go up in 2024? ›
Projections suggest that we may see no rate increases in 2024, and that the Fed might start dropping its rate later this year, according to the CME FedWatch Tool on June 11. If the Fed rate drops, CD rates will likely follow suit, though it's up to each bank and credit union if and when that occurs.
What will Fed interest rates be in 2024? ›
Selected Interest Rates
| Instruments | 2024 Jun 14 | 2024 Jun 17 |
|---|
| 1-year | 5.07 | 5.11 |
| 2-year | 4.67 | 4.75 |
| 3-year | 4.41 | 4.50 |
| 5-year | 4.22 | 4.30 |
34 more rowsNew Outlook On Monetary Policy
The median projection for the benchmark federal funds rate is 5.1% by the end of 2024, implying just over one quarter-point cut. Through 2025, the FOMC now expects five total cuts, down from six in March, which would leave the federal funds rate at 4.1% by the end of next year.
Where can I get 7% interest on my money? ›
Why Trust Us? As of June 2024, no banks are offering 7% interest rates on savings accounts. Two credit unions have high-interest checking accounts: Landmark Credit Union Premium Checking with 7.50% APY and OnPath Credit Union High Yield Checking with 7.00% APY.
How high will savings interest rates go in 2024? ›
As of June 2024, the national average interest rate on a savings account was 0.45%, according to FDIC data. However, the best online savings accounts offer rates near or above 5.00% APY.
Can you get 6% on a CD? ›
Can you get 6% on a CD? It is possible to get a 6% certificate of deposit, but these sought-after savings rates won't be available at every bank. In fact, no banks currently offer a 6% CD.
What will the Federal Reserve interest rates be in 2025? ›
In March, the last time the Fed released quarterly projections, most U.S. central bankers anticipated at least three 25 basis point rate cuts in each of 2024 and 2025. That would have put the policy rate in the 3.75%-4% range by the end of next year.
What is the interest prediction for 2024? ›
Also, mortgage rates are still much higher than we've been used to in recent years. On 30 May 2024, the average 2 year fixed mortgage rate is 5.80%. While this is a significant drop from its July 2023 peak of 6.86%, it's still much higher than December 2021 when was 2.34%.
What will Fed interest rate be in 2026? ›
On June 12, 2024, the US Federal Reserve released the June 2024 Fed dot plot, which showed a projected 2.25-point interest rate cut by yearend 2026. This would reduce the fed funds target rate range from 5.25%-5.50% today to 3.00%-3.25%.
Last year, the White House projection for bill rates in 2030 was 2.4%. Such a level would be much higher than has been typical since the turn of the century. Three-month bill rates averaged around 1.5% over that period.
What is the current Fed rate? ›
Right now, the Fed interest rate is 5.25% to 5.50%. The FOMC established that rate in late July 2023.
Will car interest rates go down in 2024? ›
Auto loan rates for new and used vehicle purchases fell in the first quarter of 2024 to 6.73% and 11.91%, respectively, down slightly from the 15-year highs we saw at the end of 2023, according to Experian.
Where to put $10,000 for best interest? ›
A stocks and shares Isa is likely to be most suitable. That is unless you will turn 55 within 30 years, in which case a pension might be a better tax wrapper for you. If you're unsure about the time horizon, you could invest in both a pension and a stocks and shares Isa.
Where can I get 5% interest on my savings account? ›
Best savings rates of 5% or more
- BrioDirect, 5.30% APY.
- Ivy Bank, 5.30% APY.
- TAB Bank, 5.27% APY.
- Jenius Bank, 5.25% APY.
- UFB Direct, 5.25% APY.
- Upgrade, 5.21% APY.
- Bread Savings, 5.15% APY.
- EverBank, 5.05% APY.
Digital Federal Credit Union has an account that pays over 6% APY, but you must meet membership requirements to get started. You also won't earn this high interest rate on your entire Digital FCU savings balance. Plenty of savings accounts are available around the U.S. and still offer great rates — over 5% APY.
What will CD rates be in 2025 in the USA? ›
Similarly, the Fed's interest rate cuts are not expected to be overly drastic, but rather, gradual. What this means is that come this time next year, you may not be able to sign a 1-year CD at 5% (or slightly more) like you can today. But it's possible that you'll be able to lock in a 1-year CD at 4.5%, or 4.25%.
Should I lock in a CD now or wait? ›
Unlike traditional or high-yield savings accounts, which have variable APYs, most CDs lock your money into a fixed interest rate the day you open the account. That's why if you suspect that interest rates will soon drop, it can be a good idea to put money in a CD to preserve the high APY you would earn.
What is the best CD rate for $100,000? ›
Best Jumbo CD Rates for June 2024
| BEST NATIONAL JUMBO CDs | | |
|---|
| CD Bank | 5.20% APY | $100,000 |
| Luana Savings Bank | 4.42% APY | $100,000 |
| All In Credit Union | 4.13% APY | $100,000 |
| Best non-Jumbo option: TotalDirectBank | 5.51% APY | $25,000 |
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