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Best Online Savings & Money Market Account Rates 2024

Best Online Savings & Money Market Account Rates

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Federal Reserve Moves Fed Funds Rate up By 50 Basis Points to a Fed Funds Target of 0.75% to 1.00%

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The Federal Reserve has finally begun to act according to its mandate to maintain price stability, but inflation is already running rampant. Today’s move is just the beginning of moves that will be necessary. The Fed’s statement left us with little in the way of guidance in terms of how far and how fast it is going, but Powell’s press conference did not.

Powell addressed the American public by saying that inflation is much too high and supply chain disruptions are being exacerbated by Russia’s invasion of Ukraine and the COVID lockdowns in China. In other words, it is possible that we still haven’t seen peak inflation.

Powell himself seems to believe the Fed is way behind the curve and is going to need to be very hawkish. Whereas economists had previously looked for another 50 basis points move at the conclusion of the June 14-15 meeting, and 25 basis points at each of its four remaining meetings, Powell introduced the possibility that there may be a series of 50 basis point moves through the year. Depositors can expect much higher rates in savings and money market accounts after today’s move and through the year.

You may want to bookmark BestCashCow’s online savings page here. You should also consider savings rates where you live here.

Alternatively, you may wish to follow savings rate changes through RatesAndInfo.com, our partner site that displays online and local rates on a single table.

CD rates are also obviously going up. We warned about rushing into CDs last week in this article. Rates have gone up since then with leading 1-year CD rates above 2% and 5-year CD rates now above 3%. CD rates will get more and more tempting, especially when we have not seen anything for cautious investors to even nibble on since the beginning of the pandemic.

Before jumping into a CD, folks need to play around the CME’s Federal Reserve Open Market Committee’s Fedwatch tool here. It demonstrates the probabilities assigned by to different interest rates by economists’ targets at the end of each upcoming Fed meeting. As of this writing, it indicates a 79% probability of a target rate of 3.25% to 3.50% following the December meeting, some seven months from now, and a 92.5% probably that we will be at that level following the July 2023 meeting.

Plenty of well known and respected economists, like Harvard’s Ken Rogoff, think the Fed is going to need to move much further and much faster in order to get the “perfect storm” of inflation under control.

Whatever happens, it should be an interesting year for savings and CD rates.


Fed Liftoff Day is Here

The Federal Reserve has raised interest rates by 25 basis points today, moving the Fed funds target rate off of zero to a target of 0.25/0.50. The target rate had been at zero since COVID-19 arrived on US shores more than two years ago, and was brought there along with extraordinary Fed intervention in an attempt to stimulate financial markets and keep the US from entering a recession or depression.

We’ve had two previous liftoff days in the last twenty years. On June 30, 2004, the Consumer Price Index (CPI) was 3.1%. And, on December 16, 2015, the CPI stood at 0.5%. The fact that the CPI has reached 7.90% before the Fed has acted indicated that Chairman Jay Powell’s monetary policy has been way behind the curve.

Not only are the Fed’s actions too late, but a quarter-point move in the Fed funds rate – or a handful of such moves as is now projected – is too timid. Even if the Fed raises each month from now until June, the Fed funds rate will only be at a target rate of 1.00/1.25 over the summer. This is not an inflation-fighting rate move.

Rather, the Fed has indicated today that in 2 years it will bring the Fed funds rate to 2.80%, but that is two years until we are finally going to be fighting inflation.

In the meantime, the Fed has created a financial market that is dramatically overvalued with valuations in many sectors that are so irrational that equity investors are all but guaranteed to lose money. As rates rise, bond prices too are certain to fall. And, because the Fed’s move is so timid and inappropriate to address current inflationary circumstances, cash investors will continue to watch the deterioration of their real wealth as rates remain below anything even remotely necessary to ensure purchasing power parity.

Jerome Powell has allowed himself and the Fed to be frozen by his uncertainty. If this world has a future after Putin, he will certainly go down in history the worst possible Federal Reserve Chairman at the worst possible moment in time.


Four Steps to Prepare for A Russian Cyberattack on the US Financial System

I practiced law in Moscow in the 1990s. While there, I learned that Russian law is an oxymoron. I also learned a lot about Russia and its strengths. I am certain that in spite every precaution that US financial institutions have taken, Russian hackers are extremely talented and have the ability to initiate a wave of crippling cyberattacks on the US system.

Now is the time to take preventative measures to avoid leaving yourself exposed.

First, maintain your liquid bank accounts across multiple banks. We should not assume that the country’s largest banks (Chase, Citibank, Bank of America, Wells Fargo) will be immune to attack. Likewise, do not assume that you local bank will be immune. No matter where you bank principally, you should be opening multiple online bank accounts and transferring assets to them. This will also enable you to take advantage of rising rates on savings and money market accounts in 2022. Compare online accounts and rates here.

Second, do the same thing with your online brokerage accounts. If you trade through Etrade or TD Ameritrade, consider opening an account with the other to be sure that you will continue to have access to financial markets in the event of an outage. After all, we know that online brokers are prone to going down without an attack. Imagine what can happen if they are deliberately targeted by the best hackers in the world. Heck, you might even want to have accounts with multiple online brokers, and depending on your asset balances, this could be a good chance to qualify for some nice cash balances. Compare online brokerage accounts here.

Third, keep detailed records on your liquid accounts and online brokerage accounts so that you can recreate any missing or removed records. Download your most recent statements monthly or take screenshots.

Fourth, consider carrying credit cards issued by multiple issuers. Lots of folks are loyal to Amex or Chase cards for their great sign up bonuses. The loyalty is understandable, but you need to carry multiple personal cards in case there is an attack that knocks one or more issuers entirely offline. Since there are plenty of cards that do not have annual fees the first year, you may want to focus on one or two of these. And, again, you might even be able to take advantage of bonuses, cash-back options or point earning capabilities that you had not previously known were available to you.

If we are fortunate and do not experience a Russian cyberattack on our system in 2022, you will have done no harm to yourself through these simple four steps.