High Savings APYs Linger for Now, but Could Drop Soon. Today’s Rates, Nov. 21, 2024 | Global News Avenue

Earlier this year, my APY High Yield Savings Account It used to be 4.25% and is now 4.00%. In the past, I’ve received regular emails from my bank when interest rates have risen, but this time, the bank quietly lowered its savings rate without any warning.

The annual yield on some high-yield savings accounts still exceeds 5%, which is more than 10 times that of ordinary savings accounts. national average — but experts don’t expect high savings rates to last forever. Based on my own experience, it’s clear that the era of high interest rates is coming to an end.

If you still hold your emergency or sinking fund In a traditional savings account, it is worth taking action to earn interest on your savings. Otherwise, you may lose interest on growing your savings.

Here are some of the top savings account APRs available today:

Experts recommend comparing interest rates before opening a CD account to get the best possible annual return. Enter your information below to get the best prices in your area from CNET partners.

What happens to your APY when the Fed cuts interest rates

Inflation rose slightly last week 2.6% per year last month. The news raises the question of what the central bank will do at next month’s Federal Open Market Committee meeting. After all, interest rates typically move in tandem with the Fed.

To be clear, the Fed does not directly set high-yield savings accounts and certificate of depositbut its policies will have ripple effects.

When the Fed raises the federal funds rate — as it has done 11 times in the past few years high inflation – Banks tend to increase annual interest rates. Likewise, when Fed cuts interest ratesbanks tend to lower their APY.

“The Fed controls short-term interest rates, which directly affects the interest rates on bank savings accounts,” said Justin Haywood, certified financial planner and president. Haywood Wealth Management. Depending on the bank, it may take weeks or even months for the changes to take effect.

After the Fed cuts interest rates for the first time this year Septembermany banks tracked by CNET are starting to cut interest rates on savings accounts. For example, lending club On October 18, its APY was cut from 5.30% to 5.15%, ending its streak as our top HYSA. On November 7, it further lowered the annual interest rate to 5.00%.

Despite the recent rise in inflation, a third rate cut in December is not out of the question. This could lead to further declines in interest rates.

Fortunately, interest rates on top-tier savings accounts are still much higher than on average savings accounts national average. But don’t wait too long to get a great deal. Here’s how savings rates looked at the beginning of this week compared to the beginning of last week:

Factors to consider before switching savings accounts

Despite falling interest rates, high-yield savings accounts are still worth it.

Melissa Murphy Pavone, Founder Mindful Financial Partnersit is recommended to keep it separately emergency fund Deposit into a high-yield savings account for easy access. Even if you want to maximize your income, it’s even more important for you to have access to funds when you need them. short term money goals.

To earn interest on your short- and long-term goals, Pavone recommends taking a layered approach savings strategy. For example, deposit funds into HYSA to achieve your immediate and short-term financial goals (within the next two years). For long-term goals, she recommends CD or treasury bills. Both still come with competitive interest rates and a degree of rate lock protection, giving you a guaranteed return.

How to find the high-yield savings account that’s right for you

Choosing a high-yield savings account is more than just choosing the best interest rate—you should first consider what you want to achieve by using these financial products.

Instead of constantly chasing higher interest rates that can change frequently, focus on your financial goals and which benefits will help you.

“Feeling safe and prepared is just as valuable as any percentage point gain,” she said.

When you decide which account and bank is best for your savings, here are some things to consider:

• Minimum deposit requirements: Some HYSAs require a minimum amount to open an account, usually $25 to $100. Others don’t need anything.
• ATM deposits and withdrawals: Not every bank offers cash deposits and withdrawals. If you need to use an ATM regularly, check to see if your bank offers ATM fee reimbursement or a variety of in-network ATMs, says Lanesha Mohip, founder of Polished CFO and a member of CNET’s Expert Review Board.
• cost: Be aware of the fees for monthly maintenance, withdrawals and paper statements, Mohip said. These fees drain your balance.
• Auxiliary functions: If you prefer in-person help, look for a bank with a physical branch. If you’d rather manage your money digitally, consider online banking.
• Withdrawal limits: Some banks charge an excess withdrawal fee if you make monthly withdrawals for more than six months. If you think you might need to make more money, consider a bank that doesn’t have this restriction.
• Federal Deposit Insurance: Make sure your bank or credit union is insured through the FDIC or NCUA. This way, if a bank fails, up to $250,000 per account holder and per category of funds is protected.
• Customer Service: Choose a bank that is responsive and makes it easy to get help with your account when you need it. Read online customer reviews and contact the bank’s customer service to get an idea of ​​what it’s like to work with the bank.

methodology

CNET reviewed savings accounts at more than 50 traditional and online banks, credit unions and financial institutions offering services nationwide. Each account has a score between 1 (lowest) and 5 (highest). The savings accounts listed here are insured by the FDIC or NCUA up to $250,000 per person, per account category, and per institution.

CNET evaluates the best savings accounts using a set of established criteria that compare annual yield, monthly fees, minimum deposits or balances and access to physical branches. None of the banks on our list charge monthly maintenance fees. Accounts that offer any of the following benefits will be ranked higher:

• Account bonus
• Automatic saving function
• Wealth Management Consulting/Counseling Services
• cash deposit
• ATM rebates used by extensive ATM network and/or out-of-network ATMs

If a savings account doesn’t have an easy-to-navigate website or doesn’t offer useful features like an ATM card, it may be rated lower. Accounts that impose restrictive residency requirements or fees for exceeding monthly transaction limits may also be rated lower.

*APY as of November 20, 2024, based on banks we track at CNET.
**Weekly percentage increase/decrease between November 11, 2024 and November 18, 2024.

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