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The Low-Down on Low Savings Rates

Interest rates matter to just about everyone. Rates affect what you pay on loans and what you earn on savings, so it’s no wonder people follow them closely. In the past several months, rates have sunk to historic lows. If you are looking to either buy or refinance your home or auto now is a good time. Rates are in your favor – really in your favor.

But what about savers? Financial institutions make money on the difference between their loan rate and the amount they pay on deposits. Now, with loan rates so low, savings rates have plummeted to near zero. People who are looking to make a good return on their savings these days have been struggling to find the best way to do that.

If you are searching for higher rates, some banks and credit unions are paying better yields than others. They are either NCUA- or FDIC-insured, so your money is safe there. The best savings account rates* currently pay about 0.70% APY** (annual percentage yield), or 7x the national average of 0.1% APY.

If growing your savings is a top priority, and you can put your money away for a set amount of time, then don’t forget about CDs. These investments are either NCUA- or FDIC-insured and are issued with terms from six months to approximately five years. It pays to shop around. For example, AARP is offering an 8-Month No-Penalty CD from Marcus by Goldman Sachs.®

Without a crystal ball, it is hard to tell exactly where rates will go in the next few years, but it’s safe to say that they are likely to remain low. Now is the time to do a little homework and decide what savings strategy will work best for you. 

*Financial Institution listings are provided as a service to our members and do not represent any affiliation with or endorsement of their products or services.
**Rate on November 13, 2020

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