Just over one week after the latest federal interest rate increase, the best savings and CD account rates are making big moves.
The Federal Reserve’s sixth consecutive rate hike pushed the federal rate range up to 3.75% – 4%. As the Fed works to tame runaway inflation, still-elevated prices and ongoing rate hikes have increased experts’ concerns about an economic downturn. There are some recent positive signs, with the most recent Consumer Price Index this week showing slightly cooled prices: inflation was up by 7.7% year over year in October.
While it’s still unclear if we’re on the brink of a recession, the message is clear — now is the time to prepare for tough economic times ahead.
“Take a look at how much are you saving, how much are you spending, getting a good handle on your expenses,” says Denise Downey, a certified financial planner and founder of Financial Trex, a financial planning firm. “Make sure you have at least three to six months of living expenses stocked away in a high-yield savings account.”
On the positive side, savings and CD rates will continue to go up and offer more valuable returns on your emergency fund. Here’s the latest on the best savings and CD rates this week, and how the Fed’s 75 basis point increase plays a part in your savings:
How NextAdvisor Analyzes CD and Savings Rates
We compare three different averages in our average CD and savings rate analysis. First, we review national deposit rates from the Federal Deposit Insurance Corporation (FDIC) and Bankrate’s national index of deposit accounts based on a weekly survey (like NextAdvisor, Bankrate is owned by Red Ventures). We also calculate the current average rate of each bank on our list of best CD rates and best savings rates — you can find more about how we choose the banks included in our lists on those pages.
The differences between national average savings rates and NextAdvisor’s analysis of interest rates is largely due to the much higher APYs that online banks pay.
National surveys from the FDIC and Bankrate include many different types of financial institutions, including large national banks that charge as little as 0.01% APY. Our lists, on the other hand, is made up of online or hybrid banks with fewer overhead costs, which allows them to pass on savings in the form of interest to customers.
What Are the Best Savings Rates This Week?
We saw big jumps in savings rates last week and expect plenty more in the weeks to come. This week, a number of the banks we track raised rates, moving the average even closer to 3.00% APY.
Bankrate’s national survey of savings account rates remained the same at 0.16% this week, along with the Federal Deposit Insurance Corporation national index at 0.21%. It’s important to note that these also include traditional savings accounts that often lag far behind other deposit rates.
As for the high-yield savings accounts we track at NextAdvisor, those that did increase their rates increased the overall average from 2.73% to 2.89%. The top savings rates are now above 3.50% — UFB Direct has a whopping 3.83% APY and Bask Bank offers a sky-high 3.60% APY on its high-yield savings.
Here are a few of the highest savings rates this week:
- UFB Direct: 3.83% APY
- Bask Bank: 3.60% APY
- Dollar Savings Direct: 3.50% APY
- Salem Five Direct: 3.50% APY
- Bread Savings: 3.50% APY
- CIT Bank: 3.25% APY
- Lending Club Bank: 3.25% APY
What Are the Best CD Rates This Week?
CD rates took another big leap too this week after the most recent Fed meeting.
According to Bankrate’s weekly national rate survey, the average one-year CD is up 0.06% to 1.11%, while three-year CDs moved up 0.03% to reach 1.00% and five-year CDs saw a 0.02% increase, to…
Read More: The Best Savings and CD Rates Are Quickly Rising Following the Fed’s Latest Rate