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Best Online Savings & Money Market Account Rates 2024

Best Online Savings & Money Market Account Rates

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Interest Rates Are Headed Down Later in 2024, But Your Savings Account Interest Rate Should Not Have Fallen Yet

Rate information contained on this page may have changed. Please find latest savings rates.

At the Fed’s March 2024 meeting Jerome Powell reaffirmed that the Fed is not cutting interest rates until it has further information and continued to guide towards three quarter-point cuts in the Fed Funds rate before the end of 2024.  In the days that followed, the Treasury curve has contracted with interest rates on the 6-month coming in by about 8 basis points and on the 2-year by as much as 18 basis points.

But, overnight rates have remained the same and will be the same until the Fed actually moves (which may or may not come at the conclusion of its May or June meetings).

While it is perfectly logical that some banks would be cutting their CD offerings (and will continue to cut their CD offerings), it is unfortunate that some banks have already cut their savings rates.   We count Ally, Discover and Milli among those that recently lowered their savings rates, and some online banks like Valley Direct and ConnectOne lowered their savings rates earlier in the year.

If you are in a bank that is lowering their savings or money marke rates already, it could be a good time to consider moving your cash to a one that not as eager to lower rates. BestCashCow's savings tables now display the last rate change and the change history. Using this table will enable you to see which rates are most sticky.

Alternatively, it may make sense to lock in a high CD rate now.


The Federal Reserve End March 2024 Meeting Again Holds Interest Rates at 5.25-5.50% Target

The Federal Reserve ended its March meeting leaving interest rates at their current target. The members unanimously indicated that they anticipate three quarter-point rate cuts before the end of 2024. Given that January and February inflation data was bumpy, Chairman Jerome Powell was non-committal on a timeline for the first cut. He said that the Fed will remain data-dependent and will not make any rate changes before its May or its June meeting. He also indicated that if inflation were to pick up dramatically, the Fed could still raise rates, although he tempered that statement by saying that he sees no indication at the moment that such action will be necessary.

What is clear is that the Fed is completely beholden to its dual mandate (price stability and maximum employment) and wants to see clear indications that inflation is heading decisively towards its 2% target before it begins to reign in interest rates.

I personally am in the camp that would be betting that the Fed will not move in May. There remains a possibility that developments in the Middle East and/or Russia could cause a global spike in energy costs again and that would factor right through to inflation. Even if the focus is not on the risk of an oil price spike, the Fed needs to get 3 months or so past the recent inflation data until it begins to cut.  And, that would put the first rate cut in the June meeting in the best-case scenario.

Interestingly, Chair Powell was asked about criticism that he has received from Republican lawmakers that high interest rates are burdening the American consumer, and about a letter that he has received from Senators Whitehouse and Warren that high rates are grinding renewable energy investment to a halt. His response was that he is sympathetic to those concerns, but that the Fed is charged by the Senate to pursue its dual mandate.

Those of us who invest in the renewable energy sector are very troubled by the slow pace of investment and it is clear that large project finance transactions cannot achieve the necessary internal rates of return (IRRs) when discounted by current rates. Unfortunately, Powell's answer to this question was correct and the Fed cannot be guided by the climate crisis while at the same time focusing on its dual mandate.


Federal Reserve Maintains Rates at 5.25% to 5.50% Target, Refuses to Guide When It May Cut

The Fed ended its January 2024 FOMC meeting by declining to specify when it may begin lowering the Fed Funds target rate.

The US Federal Reserve concluded its first 2-day Fed Open Markets Committee meeting of 2024 holding interest rates at the current 5.25 to 5.50% target, as expected. The Fed funds target rate has been at this level since July 2023.

There has been substantial improvement in curbing inflation, but there remains concern that the decline may not be anchored and could reverse.With the economy and the consumer so strong, there remains a risk of price - wage spiral inflation where consumers continue to drive up the price of goods and services.

So, it appears that the Fed is certainly finished raising rates and the Fed statement no longer includes "policy firming" language about possible additional rate increases.

Yet, at the same time, the Fed is not prepared to outline any time frame for its first rate cut of this cycle.  The committee's statement saying that it will not reducing the Fed funds rate until it is certain that inflation is headed back to its 2% target.

We began 2024 with 85% of market participants expecting the first rate cut in March.Prior to today's announcement, only 50% of market participants were expecting such a cut. During Chairman Jay Powell's press conference today, he said that he would not bet on a cut in March. Rate cuts however are likely coming at the FOMC's May or June meeting.