Did savings rates go up in 2022?

Yes. In 2022, some of the best high-yield savings accounts went from offering rates of 1.00% to offering rates well above 3.00%.

Which bank gives a 7.00% interest rate on savings accounts?

There aren't any banks in the U.S. currently offering 7.00% interest on savings. Several banks are offering high-yield savings accounts and CDs with rates of over 4.00% , however.

Who benefits from rising interest rates?

Consumers benefit from rising interest rates because they can make better returns from their savings. Financial services companies also benefit as their profit margins expand.

What is the national average savings account rate in the U.S.?

According to the Federal Deposit Insurance Corp., the national average savings account rate is 0.46% as of Feb. 27.

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How High Will Bank Savings Rates Go in 2024?

February 27, 2024

6 min Read

Written by Daria Uhlig

Edited by Lindsey Kloosterman

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The Federal Open Market Committee increased the target range for the federal funds rate by 25 basis points, to 5.25% to 5.50%, on July 26, 2023, marking the 11th increase since March 2022 and bringing the rate to its highest level since 2001. The FOMC has left that target in place in subsequent meetings, the most recent of which took place on Jan. 30. The committee, which previously had left open the possibility of more hikes if necessary to bring inflation to 2%, now suggests it might implement cuts this year.

Why Did Rates Increase?

The Federal Reserve implemented increases in the federal funds rate. The federal funds rate is the rate banks charge to lend each other money overnight, and banks use it as a benchmark to set other rates, including the yields they pay on savings accounts and certificates of deposit. While the rates don’t move in lockstep, they do tend to move in the same direction, with bank yields increasing when the federal funds rate goes up and decreasing when the federal funds rate goes down.

The Fed began increasing the federal funds rate in March 2022 in an effort to control runaway inflation resulting from the pandemic. Rate increases discourage borrowing and spending, which slows down the economy and helps to rein in consumer prices. So far, it seems to be working. The inflation rate was 8.5% in March 2022. The rate was 3.1% in January, much improved but still 1.1% above the Fed’s 2% target.

Will Savings Interest Rates Go Up in 2024?

The Jan. 30 meeting was the FOMC’s first meeting of 2024. Since the federal funds rate will remain unchanged for now, savings rates are unlikely to change significantly before the FOMC’s next meeting, which is scheduled to begin on March 19.

The minutes from the Jan. 30 FOMC meeting noted consensus among committee members that the federal funds rate is likely at its peak right now, meaning the FOMC doesn’t expect to raise the rate again during this economic cycle — i.e., this period of inflation. As a result, bank savings account rates are also unlikely to go up much, if at all. However, they’re also unlikely to drop in the immediate future.

“Members agreed that they did not expect that it would be appropriate to reduce the target range until they have gained greater confidence that inflation is moving sustainably toward 2 percent,” the minutes noted. All members reiterated their commitment to achieving 2% inflation.

Federal Reserve Board members and Federal Reserve Bank presidents made economic and federal funds rate projections in December 2023. The median projection for the 2024 funds rate was 4.6%. That’s more than a percentage point lower than the current rate.

Rates implemented in 2023 made high-yield savings accounts and CDs good places to earn risk-free returns. While you won’t find 7% rates, a number of well-known banks are offering 4% or more. That could change later this year if the Fed begins lowering rates.

Best Accounts With High Interest Rates

It’s important to put your money in the right place when savings rates are high. Here are five of the best accounts with high-yield rates for earning more from your savings.

Bank	Savings Account and APY	1-Year CD Rate
Ally	Online Savings Account —
Capital One	360 Performance Savings — *	*
Discover	Online Savings Account —
Synchrony Bank	High Yield Savings —
SoFi	Checking and Savings Account —	N/A

What Makes a Good Savings Account in 2024?

Consumers should look for a bank that has increased savings rates as the interest rates have gone up. These banks are likely to continue to offer high rates to entice new and existing customers. For anyone considering switching banks for better savings account rates, consider:

The amount of cash to which the savings rate applies
Monthly fees after opening an account
Any sign-up bonus offers
Minimum balance requirements

US Interest Rates in 2024

Until March 16, 2022, the federal funds rate, now at 5.25%-5.50%, was just 0.00% to 0.25%. A total of 11 rate hikes have occurred since then.

Date	Rate Increase
July 2023	5.25% – 5.50%
May 2023	5.00% – 5.25%
March 2023	4.75% – 5.00%
February 2023	4.50% – 4.75%
December 2022	4.25% – 4.50%
November 2022	3.75% – 4.00%
September 2022	3.00% – 3.25%
July 2022	2.25% – 2.50%
June 2022	1.50% – 1.75%
May 2022	0.75% – 1.00%
March 2022	0.25% – 0.50%

The last time interest rates were increased this much was back in 1980, when rates touched 20% — a historic all-time high.

Final Take

With high-interest savings accounts offering yields of more than 4% or more at some banks, it’s a great way for people to earn a return on their cash. Consumers may want to compare banks for the best savings rates for 2024 to maximize their returns.

FAQ

Here are some commonly asked questions about savings rates.

Did savings rates go up in 2022?
- Yes. In 2022, some of the best high-yield savings accounts went from offering rates of 1.00% to offering rates well above 3.00%.
Which bank gives a 7.00% interest rate on savings accounts?
- There aren't any banks in the U.S. currently offering 7.00% interest on savings. Several banks are offering high-yield savings accounts and CDs with rates of over 4.00%, however.
Who benefits from rising interest rates?
- Consumers benefit from rising interest rates because they can make better returns from their savings. Financial services companies also benefit as their profit margins expand.
What is the national average savings account rate in the U.S.?
- According to the Federal Deposit Insurance Corp., the national average savings account rate is 0.46% as of Feb. 27.

More on Interest Rates

David Granahan and Cynthia Measom contributed to the reporting for this article.

Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Feb. 27, 2024.

Capital One interest rates accurate as of Sept. 27, 2024. See website for all current rates.

New and existing Checking and Savings members who have not previously enrolled in Direct Deposit with SoFi are eligible to earn a cash bonus when they set up Direct Deposit of at least $1,000 during the Direct Deposit Bonus Period. Cash bonus will be based on the total amount of Direct Deposit. Direct Deposit Promotion begins on 12/7/2023 and will be available through 12/31/24. Full terms at http://sofi.com/banking. SoFi Checking and Savings is offered through SoFi Bank, N.A., Member FDIC.SoFi members with Direct Deposit can earn 4.30% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the 4.30% APY for savings (including Vaults). Members without Direct Deposit will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Interest rates are variable and subject to change at any time. These rates are current as of 10/8/2024. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.

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