Edge-of-the-seat anticipation is hovering over the upcoming announcement by the Federal Reserve, which is expected to cut back on the bond-buying program that has been putting downward pressure on interest rates. All the waiting may be the reason that savings rates have not moved much in the past four months.
From June to September, the national average savings rate has stayed at 0.29% APY, according to banks tracked by MyBankTracker.
The top nationwide savings rate stands at 0.90% APY, offered from GE Capital Retail Bank and Barclays Bank.
The previous leading savings rate of 0.95% APY, from Bank X, has fallen to 0.60% APY in early September. BofI Federal Bank, parent company of Bank X and other online banking subsidiaries, has a history of offering extremely attractive rates before making steep rate cuts.
Of the banks that we tracked, Bank X was the only one to have a rate cut, which was not enough to cause a significant change in the national average.
The lack of movement in savings rates lingers as the Fed keeps banks on its toes when it comes to monetary policy. Firstly, the central bank noted that it won’t raise benchmark interest rates until the unemployment rate falls down to 6.5 percent. We’re currently at 7.3 percent.
Then, there’s the highly speculated move by the Fed to begin scaling back quantitative easing, which involves the purchases of government securities to suppress rates. Banks are likely to leave savings rates unchanged until they’re able to decipher the Fed’s mixed signals.
In the meantime, savers should refrain from constant rate-chasing and stick with an online savings account that has offered a consistently competitive rate (the case with most of the big online banks such as Ally and Discover).
The table below shows the changes in savings rates at benchmark financial institutions from Aug. 15, 2013 to Sept. 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 8/15/13)||APY (as of 9/15/13)||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%|
To see the top savings rates currently available, refer to the widget below: