What to Know about Savings Interest Rates

by | Jun 17, 2015 | Financial Services

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The Federal Reserve has significantly cut down the Federal Funds interest rate to benefit the stabilization of today’s economy. As it stands, the interest rate is currently a measly 0.00% to 0.25%, which is something that has been in effect since 2008. These percentages decide the average savings account interest rate individuals can earn. Interest gained on savings is a great thing, but consumers should know that banks pay great attention to the current interest rate.

Banks and credit unions are actually able to offer whatever Saving Interest Rates they want. The national average savings interest rate offered by the most bank is approximately 0.17 percent. The highest savings rate in the country is 4.00% APY, and the lowest is 2.02% APY. People can find great interest rates that fall within the average range from banks and credit unions like Pearl Harbor Federal Credit Union.

Customers want to feel confident and secure when banking, but security costs money, and greater security means less interest on an initial deposit. Online banking systems have been able to give their customers security and a greater interest rate because of their decreased overhead costs. Consumers may also be able to get better interest rates at smaller bank and credit union branches, as they are not technically required to pay overhead costs for smaller branches.

There are ways to find the best Savings Interest Rates. The entire process begins by shopping around for, and comparing rates in one’s local area. While the promise of high-interest rates might sound attractive, consumers should read all of the fine print. Many credit unions and banks have other requirements that must be fulfilled to obtain these rates. Normally, certain deposits and accounts must be opened to reap the maximum benefits of these interest rates.

If a person wants to save money for the future, savings accounts are the way to go. The FDIC automatically provides insurance for balances up to $250,000, and there is a guaranteed return rate. While savings accounts are beneficial, the benefits can take a long time to build up, but many agree that they are worth the wait.

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