Fed Chairman Ben Bernanke Makes Statement That Points to Savings Rates Staying Low Until 2016
In the most recent Federal Open Market Committee meeting the Fed stated they plan to keep interest rates low until mid 2015 which is six months longer than before. This news doesn't bode well for depositors since the historically low deposit rates of the past couple of years will probably remain low for at least another three years. Current national average savings account rates are at a measly 0.08 percent this week. Money market rates are faring a little better at 0.12 percent but even that rate is obviously painfully low.
Just yesterday the Fed Chairman, Ben Bernanke, said they believe the economy will pick up steam before mid 2015 but they plan to keep interest rates low until then. They see inflation remaining low until mid 2015 so there is no need to increase rates. What this means is savings rates and money market account rates won't move higher until 2016. The best savings rates and money market rates right now just above 1.00 percent will move lower the next few years.
In fact the highest savings rates on our rate list are just above 1.00 percent at 1.04 percent. The bank offering current savings rates at 1.04 percent is CIT Bank. The yield on CIT Bank's savings account is 1.05 percent. To earn this savings rate and yield you must have at least $25,000 on deposit.
The highest money market rate on our rate list is also just above 1.00 percent at 1.04 percent. Two banks, SallieMae Bank and Union Federal Savings Bank are offering money market rates at 1.04 percent with an APY of 1.05 percent. Sallie Mae's money market account doesn't have a minimum opening balance and Union Federal's minimum is $2,500. Sallie Mae Bank recently increased money market rates from 1.00 percent to 1.04 percent.
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Both savings account rates and money market account rates can change at any time since these types of accounts are variable rate accounts. Another open for you is open a fixed rate certificate of deposit to lock in a rate. The best CD rates right now on 1 year certificates of deposit are slightly higher than these rates. CIT Bank CD rates on 1 year certificates of deposit are at 1.09 percent with an APY of 1.10 percent.
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