Good news for savers with high-yield savings accounts and CDs
Higher costs for borrowers with variable-rate debt
In a recent development, the Federal Reserve has decided to maintain its benchmark interest rate unchanged for the seventh consecutive meeting. This decision was made on Wednesday and comes as a result of expectations that borrowing costs would remain high for the foreseeable future. Savers are currently enjoying some of the best returns on savings accounts and Certificates of Deposit (CDs) in over 15 years, with an average online rate of 4.40% and a one-year CD rate of 4.971%, as well as a five-year CD rate of 3.815%. This is good news for those who have funds to spare and are looking to invest in high-yield savings accounts or CDs, which provide competitive yields that outpace inflation. However, those with variable-rate debt such as credit cards will not be as pleased given the rising borrowing costs. The Federal Reserve has indicated that only one cut is expected before the end of the year, and even then, it is likely to be small. This decision by the Federal Reserve comes after a meeting held on June 11-12, where economic projections were made by Federal Open Market Committee participants. These projections indicate that interest rates are expected to remain at their current levels for the time being. The US Federal Reserve's decision to maintain its benchmark interest rate is a signal of its commitment to controlling inflation and ensuring stability in the economy. As a result, savers can continue to benefit from high-interest rates while borrowers with variable-rate debt may face higher borrowing costs in the near future.
The Federal Reserve Board and Federal Open Market Committee released economic projections from the June 11-12 FOMC meeting on June 12, 2024.
The attached tables and charts summarize the economic projections made by Federal Open Market Committee participants in conjjunction with the June 11-12 meeting.
Accuracy
]The Federal Reserve Board and Federal Open Market Committee released economic projections from the June 11-12 FOMC meeting on June 12, 2024.[
The US Federal Reserve signalled that it will cut its key interest rate once this year.
Federal Reserve left benchmark interest rate unchanged for seventh meeting in a row on Wednesday
Savers are enjoying the best returns on savings accounts and CDs in more than 15 years with most competitive offers outpacing inflation and poised to persist for the foreseeable future
Online high-yield savings accounts yield way more than today’s overall average savings rate, with an average online rate of 4.40% as of June 11
Money market deposit accounts generate yields competitive with high-yield savings accounts and are FDIC insured, but may have a higher minimum deposit requirement than a high-yield account
CDs are still a great place to park money that can be left untouched for a fixed period of time with an average online one-year CD rate of 4.971% and five-year CD rate of 3.815% as of June 11
