How High Will Bank Savings Rates Go in 2024?

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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, 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 Dec. 13 — the last for 2023. 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 in 2024.

Why Are Rates Increasing?

The Federal Reserve has been implementing 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 November 2023, much improved but still 1.1% above the Fed’s 2% target.

Will Savings Interest Rates Keep Going Up in 2024?

The Dec. 13 meeting was the FOMC’s last meeting of 2023. Since the federal funds rate will remain unchanged for the rest of 2023, savings rates are unlikely to change significantly before the FOMC’s next meeting, which is scheduled for Jan. 31, 2024, to Feb. 1, 2024.

A Better Way to Bank

Looking ahead, the Powell made it clear that the Fed is open to additional hikes if needed, noting that it remains committed to reducing inflation to the 2% target. He said that FOMC participants “do not view it as likely to be appropriate to raise interest rates further, neither do they want to take the possibility off the table. If the economy evolves as projected, the median participant projects that the appropriate level of the federal funds rate will be 4.6 percent at the end of 2024.”

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 next 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
A Better Way to Bank

US Interest Rates in 2023

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 Nov. 20.

More on Savings Accounts

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 Dec. 15, 2023.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.

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