Current Savings Rates Stable as Hiring Soars and Unemployment Rate Tumbles

Savings account rates remain stable this week but the prospect for higher rates is looking more likely. The Department of Labor released employment numbers for April that were much stronger than expected. For the month of April, 288,000 non-farm payroll jobs were created, which was much higher than the 200,000 jobs analysts were expecting. The unemployment rate fell to 6.3 percent from 6.7 percent, the lowest point since 2008.

Surprisingly, long term bond rates didn't increase on the strong job numbers. Usually when job creation is strong and the unemployment rate tumbles, it is an early indication of higher inflation in the future due to higher wages. According to the Federal Reserve, there is still a considerable amount of "slack" in the labor force, which will keep a lid on wage inflation.

Current savings rates and money market rates on account balances of at least $10,000 are averaging 0.45 percent this week, up slightly from last week's average rate of 0.43 percent. The best savings rates in our rate database remain at 0.95 percent with an APY of 0.95 percent. The best money market account rates also remained the same at 0.90 percent.

If the unemployment rate continues to fall quickly and the number of jobs created monthly is in the 300,000 range, interest rates will move higher sooner than later. Deposit interest rates are dependent on a higher fed funds rate which the Federal Reserve has kept near zero percent for more than 5 years.

The Fed is expected to increase the fed funds rate sometime in the summer or fall of 2015 but that could change. We might see interest rates move higher in the spring of 2015 or possibly in the last quarter of 2014. Make no mistake, deposit rates are going up in the coming years, the question is when.

To help you with the never ending search for the highest savings rates and money market rates we have listed the best rates for this week.

Best Savings Account Rates

  1. CIT Bank Rate 0.95%

  2. GE Capital Retail Bank Optimizer Plus Rate 0.95%

  3. Barclays Bank Rate 0.90%

  4. GE Capital Bank 0.90%

  5. Ally Bank Rate 0.87%

  6. Colorado Federal Savings Bank Rate 0.85%

  7. FNBO Direct Rate 0.85%

  8. Discover Bank Rate 0.85%

  9. American Express Bank Rate 0.80%

  10. Bank of Internet USA 0.61%

Best Money Market Account Rates

  1. Sallie Mae Rate 0.90%

  2. Union Federal Savings Bank Rate 0.90%

  3. EverBank Rate 0.86%

  4. Ally Bank Rate 0.85%

  5. Mutual of Omaha Bank Rate 0.85%

  6. First Internet Bank of Indiana Rate 0.80%

  7. Able Banking Rate 0.80%

  8. Bank of Internet USA Rate 0.75%

  9. Discover Bank Rate 0.70%

  10. Virtual Bank Rate 0.65%

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Author: Brian McKay
May 5th, 2014