Savings Rates and Money Market Account RatesSavings account rates: Search and compare the best savings account rates and the best money market account rates from banks and credit unions. You can search for the highest interest savings rates and MMA rates in the state you live in or by the zip you live in. Once you have entered your search criteria a list of the top savings accounts rates and money market account rates will be displayed. Most savings account interest rates displayed are for regular savings accounts or for Individual Retirement Account (IRA) savings accounts.
Since the second quarter of 2013, higher long term bond yields and higher mortgage rates have been in the headlines. 10 year Treasury yields have moved up 100 basis points from a low of 1.60 percent in 2013 to yesterday’s close of 2.70 percent. Fixed conforming mortgage rates have also moved 100 basis points higher on both 30 year and 15 year mortgage loans.
Some Banks Increase Savings Rates and Other Deposit Rates
While some interest rates have been moving up, others have not. Savers continue to miss out on rising rates because deposit rates haven’t budged at all the past year. Granted, there have been some banks increasing their savings rates, CD rates, and money market rates but overall the majority of banks and credit unions haven’t increased rates.
The majority of financial institutions are not expected to increase their deposit rates for one reason only – the fed funds rate. Deposit rates, unlike bond rates and mortgage rates, are tied to the federal funds rate. The Federal Reserve sets the federal funds rate based on unemployment and the expected inflation rate.
For the past 5 years, the Fed has kept the fed funds rate near zero percent because the unemployment rate is high and the outlook for inflation is low. A low fed funds rate helps foster growth which lowers the unemployment rate. The Fed’s policy of keep the fed funds rate near zero percent has forced deposit rates down to record lows.
Record Low Average Savings Account Rates, MMA Rates and CD Rates
National average deposit rates have been at or near historical lows for years now. To give you a perspective of how low rates are these days, the FDIC’s national average savings account rate is at a paltry 0.08 percent this week. The national average money market rate isn’t much higher at 0.12 percent and 1 year bank CD rates are only averaging 0.20 percent.
While average savings rates are at record lows, the best savings rates available are much higher than the averages but still low historically speaking. Currently, the highest savings account rates are just under 1.00 percent at 0.95 percent. The best money market rates are slightly below that at 0.90 percent and the best CD rates are slightly above those rates at 1.04 percent.
Low Deposit Rates Hurt Retiree Income but Help Homeowners
These low deposit rates have been a hardship for retires who rely on interest income to help fund their retirement. 1.00 percent deposit rates won’t earn you much interest, even on a $1 million nest egg. For example, a $1 million account earning 1 percent (compounded monthly) equals $10,045.96 in interest. A $1 million nest egg, earning a 5 percent rate give you an annual return of $51,691.90 in income.
Low mortgage rates have been welcome news for homeowners who financed their home purchase. Low mortgage rates have helped the housing market recover from the worst bust since the Great Depression. A relative of mine refinanced their mortgage last year from a 30 year loan to a 15 year loan with an incredibly low rate of 2.75 percent. As a result, they’ll end up saving over $400,000 in mortgage interest payments over the life of the loan.
When Will Deposit Rates Increase?
Exactly when will deposit rates increase? We have been asking that question for years now. Until recently, the Fed was leading us to believe the fed funds rate will be increased when the unemployment rate falls below 6.5 percent. The current unemployment rate is at 6.6 percent but the economy is still on shaky ground. As a result, the Fed has since changed their view on when the fed funds rate should be increased.
For the past several months, the Fed has stated a 6.5 percent unemployment rate shouldn’t be viewed as a target for a higher fed funds rate. Now that the Fed has “decoupled” the unemployment rate to a higher fed funds rate, when will the rate be increased? In December, the Fed released forecasts for economic growth, inflation, and when the fed funds rate would be.
A majority of Fed Committee participants believe there will be a need for “policy firming” sometime in 2015. Policy firming is Fedspeak for a higher fed funds rate. So now the answer to the question, “When will deposit rates finally go higher?” is…2015.
Mortgage Rates Have Already Increased from Record Lows
While deposit rates are still at or near record lows, the same can’t be said for mortgage rates. The low point for mortgage rates was over a year ago when average 30 year mortgage rates hit a record low of 3.27 percent. 30 year mortgage rates today are more than 1.00 percent higher averaging 4.33 percent.
Average mortgage rates will continue to move higher in 2014 and are forecasted to be about 75 basis points higher than current levels by the end of the year. The Mortgage Bankers Association has forecasted average 30 year mortgage rates to increase to 5.00 percent and move slightly above 5.00 percent in 2015.
Some banks and credit unions have been increasing long term CD rates but variable rate accounts like savings accounts rates and money market account rates haven’t moved higher at all. Long-term fixed rate certificates of deposit are moving higher since long term bond yields are moving higher.
Banks and credit unions are eager to lock savers into long term low rate certificates of deposit. At this point I wouldn’t recommend locking in interest rates since rates will be moving higher in 2014. You’re better off parking your cash in variable rate accounts. By doing that, your deposits will earn higher rates when interest rates finally do move higher.
Another option is investing in short-term certificates of deposit of 1 year or less. The best rates on 1 year CD accounts are at 1.04 percent but you can also get a 1.00 percent rate on a 6 month certificate of deposit. Either variable rate accounts or short term CD accounts are the way to go right now.
Listed below are this week’s best savings rates and money market rates:
Top Money Market Account Rates December 3, 2013
Top Savings Rates December 3, 2013
For many years now we have all been patiently waiting for the cycle of low interest rates to end. Savings rates, money market rates, and all deposit rates have been at or near record lows since the Great Recession of 2008. The Federal Reserve lowered their key interest rate, the federal funds rate all the way down to a range of zero percent to one quarter percent.
Average Savings Rates and Best Savings Rates
The Federal Reserve’s action sent the best savings rates and money market rates below 1.00 percent. Average interest rates are even lower. The current average rate on accounts of at least $10k is at 0.45 percent. The best interest rates this week for account balances of at least $10k are from The Palladian PrivateBank at 1.00 percent.
Jumbo Savings Rates the Same as Regular Savings Rates
Average savings/money market rates for account balances of at least $25,000 are slightly higher at 0.58 percent. Account balances of at least $50,000 have an average rate of 0.64 percent. Notice how the higher account balances only earn a slightly higher rate? Gone are the days of higher jumbo rates for higher account balances, at least for now.
Most banks and credit unions are not really offering higher rates on jumbo accounts. Before the financial crisis you could easily find financial institutions offering jumbo rates anywhere from .50 to 1.00 percent higher than regular account rates. We will probably see higher jumbo rates in the future when all rates move higher.
Budget and Debt Ceiling Talks Will Drive the Direction of Interest Rates
A lot depends on how the budget and debt ceiling talks play out in Washington. The Government shutdown won’t have a direct impact on interest rates but a prolonged shutdown will. If the shutdown lasts for months, it will negatively impact economic growth which would keep a lid on any interest rate increases.
The debt ceiling is an entirely different animal and can’t directly have an impact on interest rates. If the debt ceiling is breached and the United States defaults on its debt, initially U.S. bond rates will move lower. This will also keep savings rates and all deposit rates at current levels or will continue to drift slightly lower.
Default on Debt Unlikely According to Moody’s CEO
Moody’s CEO Raymond McDaniel said in an interview with CNBC that a default was highly unlikely. I hope he’s right because a default would send equity prices tumbling and bond yields lower as well. Bond rates would initially move lower because everyone assumes in the long run the U.S. will pay its debt off.
Rates would initially move lower because there would be a classic flight to quality in the markets as everyone would dump stocks and flee to the safety of U.S. Treasuries. This is ironic because if there were a default, then everyone would buy the very same bonds from the country that defaulted.
You can read and view the video of CNBC’s interview of Moody’s CEO here: Moody’s CEO: US default ‘extremely unlikely.’
Bond yields continue to move higher this month as deposit rates on savings accounts and money market accounts languish near record lows. Long term bond yields started moving higher in early May after the bond markets believed the Federal Reserve would slow down or completely stop their purchases of long term bonds.
The markets overreacted and have since calmed down but long term bond yields are not far from recent highs. Any signs that the economy is picking up steam will send yields even higher. This doesn’t mean savings rates and money market rates will move higher, that will have to wait until the Federal Reserve increases their key benchmark interest rate, the federal funds rate.
This week Monitor Bank Rates reported the national average savings account rate on account balances of at least $10,000 remains at 0.49 percent. The national average rate on savings balances of at least $25,000 is at 0.62 percent, a 1 basis point decline from last week’s average rate.
The average savings rate on account balances of at least $50,000 is at 0.65 percent, also down 1 basis point from the prior week. The national average savings rates/money market rates published by Monitor Bank Rates is many times the FDIC national average rate. In this week’s Weekly National Rates and Rate Caps the average savings account rate is at 0.06 percent and the average money market rate is at 0.09 percent.
Monitor Bank Rates’ rate tables are offering rates considerably higher than the national average jumbo interest rates reported by the FDIC. The current national average jumbo savings rate is at 0.06 percent and the national average jumbo money market rate this week is at 0.14 percent. These rates are average rates, Monitor Bank Rates has many banks in our database that are currently offering savings rates and money market rates well above the averages. The best savings rate in our database this week is at 0.90 percent from Barclays Bank. The best money market rate is also at 0.90 percent from Sallie Mae Bank.
You can search for and compare the best savings rates and money market rates by searching our database. We list regular account rates based on account balances. We also list jumbo rates and IRA rates.
10 year bond yields declined this past week on a weaker than expected 1st quarter Gross Domestic Product (GDP) report last week as the best savings rates remained unchanged. Analysts were expecting growth to come in at 3 percent for the 1st quarter but the actual number was 2.5 percent. On the GDP report released last Friday, 10 year bond yields declined from 1.71 percent to 1.66 percent.
In early March, 10 year bond yields were just over 2.00 percent and have declined to the lowest point this year. During the months of March and April, several economic reports that were released showed slowing growth, which in turn sent rates lower.
Weak retail sales were reported along with lower consumer sentiment, pointing to a slowing economy in the 2nd quarter. Continued slow growth will keep the Federal Reserve from ending policies that are designed to keep interest rates low.
This will keep interest rates low on all interest-bearing securities. Bond yields, savings rates, money market rates, and CD rates will all remain low until the economy grows faster and the unemployment rate is lowered.
The current national average bank rates rate on savings/money market account balances of at least $10,000 is at 0.50 percent. Account balances of at least $25,000 are averaging a rate of 0.66 percent and account balances of at least $50,000 are averaging a rate of 0.68 percent. These average rates are considerably higher than the FDIC national average savings rate of 0.06 percent.
The best savings account rates this week on our national rate list are from CIT Bank at 1.00 percent with an APY of 1.01 percent. CIT Bank’s savings rate is much higher than the average rates as reported by MonitorBankRates.com and more than 13 times the FDIC national average rate.
The best money market rates this week on our database are also higher than the averages and many times the FDIC national average rate. The FDIC’s average money market rate this week is at 0.10 percent on regular accounts and 0.16 percent on jumbo accounts. The highest money market rates this week in our database are ten times the national average at 1.01% APY.
The savings rates and money market account rates listed in our database are all from FDIC insured banks. You can find regular, jumbo, and IRA account rates in our database here: Savings Rates
The Federal Open Market Committee (FOMC) wrapped up their two day meeting yesterday and right after the meeting the Fed released their statement. There were no surprise announcements from this conference so we can expect savings rates to remain where they are for now.
In the Fed’s statement they said they will continue their purchases of $40 billion a month in mortgage-backed securities (MBS) and $45 billion a month in long term U.S. Treasuries. The Fed plans to keep the purchasing going even as the economy and job markets improve.
The Fed Chairman, Ben Bernanke, also held a press conference after the meeting and said, “We may adjust the flow rate of purchases month to month to appropriately calibrate the amount of accommodation we’re providing, given the outlook for the labor market.” The Fed plans on adjusting their purchases each month based on several measures including payroll numbers, wage growth, and jobless claims.
The Fed has been trying to increase economic growth and lower the unemployment rate ever since the “Great Recession.” The Fed has been doing this by providing liquidity to the markets (buying MBS and long term Treasuries) and by keeping its key interest rate low. The Federal Funds rate has been just above zero percent for over 4 years now.
The Fed plans to keep the rate that low until the unemployment rate falls below 6.5 percent and as long as the outlook for inflation is less than 2.5 percent. The Fed believes the unemployment rate will fall below that level sometime near the end of 2015. The Fed also believes inflation will remain below 2.5 percent for the next two years.
If the Fed is right, we can expect the best savings rates to remain just above 1.00 percent for the next couple of years. If the Fed is wrong, it will probably be due to inflation going higher than 2.5 percent, which means interest rates will start raising pretty quickly. A Fed funds rate just above zero percent is very accommodating, so the Fed will have to quickly increase rates to at least 2 percent for the Fed’s stance to be neutral and not contributing to inflation.
America Saves Week 2013 is from February 25 to March 2 and is designed for individuals to assess their savings and for organizations to promote savings. America Saves Week was started in 2007 and is coordinated by America Saves and the American Savings Education Council.
Each year thousands of organizations participate, reaching millions of people about saving and building wealth. As an individual, you can sign up and pledge to save and join over 310,000 people to have already pledged to save. Doing so will not only help you build wealth but also help you avoid use of credit cards or other high interest loans if an emergency arises.
In addition to providing a pledge form, Americasavesweek.org also has other useful information and tools to help you save money. According to America Saves Week, if you’re a male and you want to retire at age 65 without any source of income other than your savings and want $50,000 a year in income for life, you would have to save $620,000. Females (who live longer than males on average) would have to save $665,000 to have an average income of $50,000 a year for life.
The organization also states (and we agree wholeheartedly) that the most effective way to save is by having a percentage of your income automatically deposited into a savings account or retirement account. You probably already have direct deposit set up and have your paycheck deposited into a checking account, less what you contribute to your 401(k).
All you have to do is set up another account, preferably a savings account, and place a percentage of your paycheck into that account. If you save $200 a month over 30 years and the account savings rate is at 5.00 percent on average you’ll have $170,000 in the account.
Granted, these days the highest savings rates are at 1.00 percent but the future direction of savings rates will be higher in the coming years. You can make up the difference for currently low savings rates by placing more than $200 a month into an account. Over time, compound interest is the easiest way to make money, your money makes money for you.
Americasavesweek.org also has a series of videos you can watch to help you learn about saving. The video below is rather campy but you get the idea about saving to make purchases instead of using a credit card.
As we begin 2013 savings rates and money market rates are at record or near record lows. Average savings account rates in the FDIC’s weekly rate survey are at a pathetic 0.07 percent. Average money market rates are just as pathetic at 0.11 percent. Jumbo savings rates are also at 0.07 percent and jumbo money market rates are only slightly higher at 0.17 percent.
We won’t see higher savings rates or money market rates in 2013 as banks have already started lower rates. Currently, the best savings rates on our rate list are at 1.00 percent and the best money market rate is slightly higher at 1.04 percent (APY 1.05%). The rate declines in 2013 will be minimal since rates are already so low, they can’t really move much lower.
Shopping around will get you a better rate. On our rate lists we have dozens of banks offering savings rates and money market rates above the FDIC average. Right now the highest savings rates are from CIT Bank and Barclays Bank at 1.00 percent with an APY of 1.00 percent. These two banks are offering rates almost 15 times the FDIC average rate.
The highest money market rates are from Union Federal Savings Bank at 1.04 percent with an APY of 1.05 percent. Union FSB’s money market rate is almost 10 times the FDIC average rate. EverBank is another bank on our rate list that is offering money market rates above 1.00 percent. EverBank is offering a 6 month promo money market rate at 1.25 percent which makes the overall first year APY at 1.01 percent.
Feel free to use our rate list below to find the best savings account rates or best money market account rates. All the banks listed on our rate table have deposits insured by the FDIC for up to $250,000.
Current savings account rates are stable as the country starts to head over the fiscal cliff and hit the debt ceiling before the end of the year. Talk about throwing fuel on the fire the Treasury Secretary send a letter to both houses of Congress letting them know that the debt ceiling will be hit before the end of 2012. This news don’t have a positive impact on savings rates and money market rates but if a deal isn’t reached or if the country defaults on it’s debt we might see a recession and if that happens rates on interest bearing assets will fall ever lower from the pathetic levels.
The best savings rates are still at 1.00 percent this week and the best money market rates are slightly above 1.00 percent at 1.04 percent. Average money market rates/savings rates on account balances of $10,000 are also unchanged at 0.51 percent. Larger account balances earn slightly higher interest rates, account balances of at least $25k earn an average rate of 0.58 percent and account balances of at least $50k earn a rate of 0.64 percent.
Interest rates won’t be moving higher in 2013 but will drift slightly lower. That being said you might want to lock in a rate just above 1.00 percent by investing in a certificate of deposit. Right now the best CD rates on 12 month certificates of deposit are also just above 1.00 percet at 1.04 percent. Which ever deposit account you choose you can always find a list of the highest rates by searching our rate tables. I have put together a list of the top savings rates and money market rates below:
Top Savings Rates
Top Money Market Account Rates
As we close out 2012 and head into 2013 we don’t expect to see average rates or the best rates much higher from where rates are right now. What we probably will see is the continue slow declines on both average rates and the highest rates available. In fact, this pattern will continue for at least another two years as the Federal Open Market Committee holds the Fed funds rate at near zero percent to lower the unemployment rate and foster growth.
The Fiscal Cliff is coming our way, now is the time to lighten up on stock holdings and place the funds into an old fashioned interest bearing savings account. If you haven’t looked at your savings account rate recently or opened a savings account, you probably have no idea how low savings rates are right now and are surprised to see the best savings rates at 1.05 percent.
That is the reality of where rates are right now, the best money market rates are also at 1.05 percent. I agree, both these interest rates are low but when you compare these rates to the FDIC average savings rate of 0.08 percent and average money market rate of 0.12 percent, things start to look a lot better.
Take the comparison one step further, just this morning Marc Faber said on CNBC that stocks will fall 20 percent from current levels regardless of the fiscal cliff or the problems in Europe. Those rates are starting to look even better now. Below are the highest savings account rates and money market account rates this week:
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