(Please check out our latest savings rates report.)
For the third straight month, the national savings average has not budged — staying at 0.29% APY. The lack of movement in savings rates may signal that banks are waiting for see how the Federal Reserve reacts to the U.S. economy, before changing rates. With more speculation that the Fed will taper its bond-buying program soon, economic progress may be seen as sustainable enough to warrant a rate hike.
The latest CD Rates Report also supports that theory as the national rate averages for long-term CDs have reversed course and started to increase. However, savings rates are not yet at that point. It’s not surprising since savings rates tend to fluctuate much less than CD rates.
The upbeat economic outlook is also a response to the dwindling unemployment rate. According to the Bureau of Labor Statistics, the July 2013 unemployment rate was 7.4 percent, the lowest it has been since December 2008.
Given that the Fed plans to raise interest rates when unemployment rate falls down to 6.5 percent, the improvement brings us closer making that a reality. And, savers will start to see deposit rates increase.
However, it’s worth noting that central bankers predict that the jobs market will not reach the point that justifies a rate hike until 2015.
The top nationwide savings rate is still held Bank X, a recently launched online bank, at 0.95% APY. GE Capital Bank and Barclays Bank are tied for the second-highest savings rate at 0.90% APY.
The table below shows the changes in savings rates at benchmark financial institutions from July 15, 2013 to Aug. 15, 2013. By monitoring the savings rates at some of the largest banks, we get an idea of where rates at other banks and financial institutions are headed.
|Bank||Savings account||APY (as of 7/15/13)||APY (as of 8/15/13)||APY Change|
|Bank of America||Regular Savings||0.01||0.01%||0%|
|Ally Bank||High Yield Savings||0.84%||0.84%||0%|
|Capital One 360||360 Savings||0.75%||0.75%||0%|
|American Express||Personal Savings||0.85%||0.85%||0%|
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