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.
Ally Bank savings rates were increased again yesterday and are now at 1.59 percent with a yield of 1.60 percent. The old savings account rate at Ally Bank was 1.44 percent with a yield of 1.45 percent.
HSBC Bank Money Market Rates are higher this morning after the bank increased the rate by 20 basis points. Money market account rates at HSBC are now at 1.49 percent with a yield of 1.50 percent. The old HSBC MMA rate was at 1.29 percent with a yield of 1.30 percent.
Capital One 360 money market rates were increased to 1.59 percent with an APY of 1.60 percent. The old money market rate was 1.49 percent with a yield of 1.50 percent.
EBSB Direct money market rates were recently increased to 1.78 percent with an annual percentage yield of 1.80 percent. The old EBSB Direct money market rate was much lower at 1.56 percent with an annual percentage yield of 1.57 percent.
Incredible Bank just increased their savings rates to 1.81 percent with an APY of 1.82 percent. The old savings account rate was 1.75 percent with a APY of 1.76 percent.
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
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