How Much Higher Will Rates for Savings Accounts Go In 2023?

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The federal funds rate is expected to peak in 2023 between 3.90% and 4.90%, so savings account interest rates could go up to anywhere between 4.00% and 4.85% based on previous increases. Interest rates already went through the roof in 2022, marking the fastest rate hike cycle in decades. The Federal Reserve’s quantitative tightening plan, headed by Jerome Powell, significantly impacted interest rates as it attempted to curve inflation.

U.S. Interest Rates in 2022

Beginning in March 2022, the federal funds rate was just 0.25%, which has now risen to 4.50%. A total of seven rate hikes occurred during the year.

Date Rate Increase
March 2022 0.25%
May 2022 0.50%
June 2022 0.75%
July 2022 0.75%
September 2022 0.75%
November 2022 0.75%
December 2022 0.50%

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

Will Savings Interest Rates Go Up in 2023?

Savings interest rates are still expected to rise in 2023, at least in the short term. If the Federal Reserve stops the quantitative tightening — which isn’t expected just yet — interest rates will stay where they are. A high-yield savings account could be a good place to earn a risk-free return for the year ahead, even if rates don’t continue to go up.

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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 One-Year CD Rates
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 2023?

Consumers should look for a bank that has increased savings rates as the interest rates go 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 a savings rate is available for.
  • Monthly fees after opening an account. 
  • Any sign-up bonus offers. 
  • Minimum balance requirements.

Final Take

With high-interest savings accounts offering yields close to 4.00% with 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 2023 to maximize their returns.

More on Savings Accounts

More on Interest Rates

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GOBankingRates’ Best Banks 2023

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 in the 4.00% range, 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 FDIC, the national average savings account rate is 0.30% at the moment.
  • Where can I get 5.00% interest on my money?
    • There aren't any savings accounts offering 5.00% interest right now. CDs are a good alternative for a higher rate.

Data is accurate as of Jan. 13, 2023, and is subject to change.

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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About the Author

David is a qualified financial advisor in the Republic of Ireland. He has a bachelor's degree in business and entrepreneurship, as well as over five years of investing experience.
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