What do Fed Rate Increases in 2023 Mean for Savings Accounts Advertiser disclosure You’re our top priority. Each day. We believe everyone should be able make financial decisions without hesitation. And while our site doesn’t include every financial or company product on the market, we’re proud of the advice we offer as well as the advice we provide and the tools we create are objective, independent, straightforward — and completely free. So how do we make money? Our partners compensate us. This can influence the products we write about (and where those products appear on the website) however it in no way affects our suggestions or recommendations that are based on many hours of study. Our partners do not promise us favorable ratings of their goods or services. . What do Fed Rates Increases in 2023 Mean for Savings Savings accounts Interest rates for high-yield savings account in 2023 are likely to rise, although not as fast or as fast as they did the previous year. Written by Margarette Burnette, Senior Writer Savings accounts as well as money market accounts banking Margarette Burnette is a savings specialist who has written about bank accounts from before the Great Recession. Her work has been published in , and other major newspapers. Before being a member of NerdWallet, Margarette was a freelance journalist with bylines in magazines such as Good Housekeeping, and Parenting. She is located in Atlanta, Georgia. Feb 2 2023, 2023 Edited by Yuliya Goldshteyn Assistant Assigning Bank Yuliya Goldshteyn is a bank editor for NerdWallet. She has previously worked as an editor, writer , and research analyst in industries ranging from health care as well as market research. She graduated with a bachelor’s degree in the field of history from University of California, Berkeley. University of California, Berkeley and a master’s in sociology from the University of Chicago. You can reach her at
. The majority of products we feature are made by our partners, who pay us. This influences which products we review and the location and manner in which the product appears on the page. But, it doesn’t affect our opinions. Our views are our own. Here is a list of and . It’s 2023 and it’s 2023 and the Federal Reserve just announced a federal funds rate range increase of 0.25%. This comes after seven rate increases in 2022. The increase has brought the range of target funds rates up to 4.5%-4.75%. This is less than some of the dramatic changes in 2022, but the rate is at their highest level since 2007, which was the last time the target was 4.75%. All of the recent rate hikes translate to loans as well as credit card accounts are more expensive. If you’ve got the option of a savings account or certificates of deposit you might benefit. Let’s take a look at what the most recent rate hike could be for savings accounts in 2023. Savings accounts: 3% APY or more. In early 2022, some of the most reputable savings accounts had just 0.50% annual percentage yield. Today, the best savings accounts and a few of the top high yield savings accounts are earning 4% APY. This is an impressive increase for one year. The latest announcement reveals an increase that is smaller than most of the 2022 rate hikes, don’t be expecting to see yields more than eight times higher. However, you may still find yields that are a little higher, and more accounts may reach the 4% figure. Keep an eye out for high-yielding savings accounts on the internet specifically, as they tend to offer some of the most lucrative rates. On the other hand savings accounts at a handful of the nation’s largest banks have rates that are 0.01%, despite the numerous federal fund rate hikes in the last year. They are not as high as the national average savings rate, which was 0.33 percent at the time of writing on the 17th of January, 2023 as per the Federal Deposit Insurance Corp. If you have an account for savings that has an unsatisfactory rate, it could be worthwhile to shop for a savings account that pays 3%-4% annual percentage. You can save for the future One of the main reasons why the Federal Reserve has been increasing rates is that it wants to fight the rise in inflation. The efforts of last year appear to be working. Based on the U.S. Bureau of Labor Statistics, consumers price index, which is often used as a measure of inflation, grew 6.5 percent over the course of the year during the month of December. The figure, although excessive compared to the previous years, is lower than the previous summer in the summer of 2022, when the CPI was 9.1 percent year-over-year during June of 2022. If inflation stays in that Federal Reserve target range in the next few months, the rate hikes might come to an come to an end. This is a good reason to invest in a high-yielding account today. Nobody can anticipate the future, but having a strong savings account can prepare for a financial storm. It’s ideal to have between three and six months’ worth of expenditures in savings however that’s quite a bit. Even if you’re not having as much in savings it is possible to accumulate it over time , in amounts that are feasible for you. Imagine you receive a check twice a month and are able to save $50 each payday. There will be more than 600 dollars saved in six months. This could be a great help in an financial crisis. Placing that money in an account that has a high rate could help you build your money. The difference a high-yielding savings account makes Where you keep your savings can impact the balance. If you place your emergency fund of $600 into an account with a 0.01% APY like that provided by a number of the biggest national banks, and you didn’t make any further deposits, it would earn an average of just 6 cents in the course of one year. If that money were stored in a savings account with a high yield with a 4.00% annual percentage rate, even if you didn’t deposit any more money the balance would increase by more than $24 in the same time frame. This is a profit for picking a more efficient savings account. You can test your own calculations with NerdWallet’s calculators to see what your savings can earn. Fed rate hikes are on the way to continue until 2023 — so far. Take advantage by storing your cash in a high-yielding savings account. You’ll earn higher rates than with a regular savings account, and will be more prepared for whatever financial situations occur. The author’s bio: Margarette Burnette works as a saving account expert at NerdWallet. She has had her work highlighted on USA Today and The Associated Press. On a similar note… Benefit from better rates As rates rise, see our top choices for high yield account for savings online. Explore even more deeply in banking. 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