How Much Higher Will Rates for Savings Accounts Go in 2023?
The Federal Open Market Committee decided to maintain the target range for the federal funds rate at 5.00%-5.25%, according to Federal Reserve Chairman Jerome Powell, speaking at a June 14 press conference. Interest rates already went through the roof in 2022, marking the fastest rate hike cycle in decades. However, the current hold represents the first time the Fed did not raise interest rates in well over a year.
Read: How To Guard Your Wealth From a Potential Banking Crisis With Gold
Will Savings Interest Rates Go Up in 2023?
According to Reuters, one-third of economists believe that there could be one more interest rate hike before the end of 2023.
A high-yield savings account could be a good place to earn a risk-free return for the year ahead, even if rates don’t continue to go up.
Best Accounts With High-Interest Rates
It’s important to put your money in the right place when savings rates are high. Here are five of the best accounts with high-yield rates for earning more from your savings.
Bank | Savings Account and APY | One-Year CD Rates |
|---|---|---|
Online Savings Account — | ||
360 Performance Savings — | ||
Online Savings Account — | ||
High Yield Savings — | ||
Checking and Savings Account — | N/A |
What Makes a Good Savings Account in 2023?
Consumers should look for a bank that has increased savings rates as the interest rates go up. These banks are likely to continue to offer high rates to entice new and existing customers. For anyone considering switching banks for better savings account rates, consider:
The amount of cash to which the savings rate applies
Monthly fees after opening an account
Any sign-up bonus offers
Minimum balance requirements
U.S. Interest Rates in 2022
Beginning in March 2022, the federal funds rate, now at 5.00-5.25%, was just 0.25%. A total of seven rate hikes occurred during the year.
Date | Rate Increase |
|---|---|
March 2022 | 0.25% |
May 2022 | 0.50% |
June 2022 | 0.75% |
July 2022 | 0.75% |
September 2022 | 0.75% |
November 2022 | 0.75% |
December 2022 | 0.50% |
The last time interest rates were increased this much was back in 1980, when rates touched 20% — a historic all-time high.
Final Take
With high-interest savings accounts offering yields of up to 4% or more at some banks, it’s a great way for people to earn a return on their cash. Consumers may want to compare banks for the best savings rates for 2023 to maximize their returns.
More on Savings Accounts
More on Interest Rates
FAQ
Here are some commonly asked questions about savings rates.
Did savings rates go up in 2022?
Yes. In 2022, some of the best high-yield savings accounts went from offering rates of 1.00% to offering rates well above 3.00%.
Which bank gives a 7.00% interest rate on savings accounts?
There aren't any banks in the U.S. currently offering 7.00% interest on savings. Several banks are offering high-yield savings accounts and CDs in the 4.00% range, however.
Who benefits from rising interest rates?
Consumers benefit from rising interest rates because they can make better returns from their savings. Financial services companies also benefit as their profit margins expand.
What is the national average savings account rate in the U.S.?
According to the FDIC, the national average savings account rate is 0.42% as of late June 2023.
Where can I get 5.00% interest on my money?
There aren't any savings accounts offering 5.00% interest right now, but some banks, like CIT Bank, are offering rates that are close. CDs are also a good alternative for a higher rate.
Daria Uhlig and Cynthia Measom contributed to the reporting for this article.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of June 27, 2023.
This article originally appeared on GOBankingRates.com: How Much Higher Will Rates for Savings Accounts Go in 2023?
