What the Fed's Latest Move May Mean For Savings Accounts
On Wednesday, the Federal Reserve held interest rates steady. Here’s what you need to know about the Fed’s impact on savings rates.


On Wednesday, the Federal Reserve held interest rates steady. The short-term federal funds rate remained at its target range of 5.25%-5.50%. Since March 2022, the Federal Open Market Committee (FOMC) the central bank's rate-setting group, has been increasing interest rates in an attempt to combat inflation.
Although rates remained steady this time, the Fed has raised rates 11 times since March 2022, and more rate hikes are still on the table. The central bank reiterated prior language from its policy statement saying “the Committee would be prepared to adjust the stance of monetary policy as appropriate if risks emerge that could impede the attainment of the Committee’s goals," which could mean that the FOMC could be raising rates at their next meeting.
Rates on savings accounts may taper off or decline due to the pause in raising the Fed funds rate. If the central bank changes course and raises rates at the next meeting, savings rates would likely go up. Here's what you need to know about the Fed’s impact on savings rates.

Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
What this means for savings accounts
Understandably, the question on many people's minds after the latest Fed announcement is: are we at the peak for savings accounts?
When the Fed raises interest rates, typically rates on savings accounts also go up. This is because offering a high APY (annual percentage yield) on accounts is an effective way for banks to compete for customers and attract deposits. For this reason, you’ll likely see the highest rates among smaller, online banks as opposed to brick-and-mortar institutions.
Therefore, savings rates have been steadily on the rise since the Fed began hiking interest rates last year. In fact, some of the top earning high-yield savings accounts, money market accounts and CD accounts are offering impressive rates — over 5% in some cases. You can use our new comparison tool — powered by Bankrate — to compare rates on high-yield savings accounts, as well as CDs, today.
Earlier this year, Bankrate predicted that rates would peak before leveling out, and after the July Fed meeting it seemed that less than likely to happen — despite bank failings and slowing inflation. Although the Fed held rates steady, the Fed has indicated they were still open to hiking rates this year. We will have to wait for the next FOMC meeting in November to see if the Fed increases rates again.
Related Content

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.
-
Americans Plan to Tip More This Holiday Season. Will You?
Younger generations — Millennials and Gen Z — are most likely to tip and also most likely to increase the amount they tip this year, Bankrate study shows.
By Kathryn Pomroy Published
-
Ford Recalls 45,000 Cars Over Faulty Door Latches
The Ford recall follows its 2020 recall for the same issue. Here's what to know.
By Jamie Feldman Published
-
Best 3-Month CD Rates
Check out the best 3-month CD rates available today. 3-month CDs are great for investors looking for short-term investments that yield strong results.
By Erin Bendig Published
-
This 12-Month CD Offers a 6% APY — But You’ll Want to Lock in Rates Soon
CD rates are exceptionally high — but they won’t stay this way forever. Lock in this 6% rate while you can.
By Erin Bendig Published
-
High-Yield Savings Accounts Luring Spenders. Should You Move Your Cash?
High-yield savings accounts are offering rates as high as 5.33%, drawing 3 in 5 Americans to save rather than spend, new survey shows.
By Seychelle Thomas Published
-
What is FDIC, NCUA and SIPC Insurance? How Much Does it Cover?
FDIC, NCUA, and SIPC insurance provides important protection for your savings and investments but what are the limits? How much of your money is covered?
By Erin Bendig Published
-
Have You Saved Enough For Retirement?
At least half of workers surveyed by Bankrate think they haven't saved enough for retirement. One-third think they are significantly behind in their savings. Are you?
By Seychelle Thomas Published
-
CD or Money Market: Where to Stash Your Cash
Both CDs and money market accounts offer good prospects right now. What's the difference and which should you choose?
By Seychelle Thomas Published
-
How To Get the Best Savings Account Bonuses
By opening the right savings account today, you could be maximizing your earnings through both compound interest and cash bonuses.
By Erin Bendig Last updated
-
You Can Now Get 3 CD Deals For Over 5.6%
These CD accounts currently have an APY of over 5.6%, some of the highest rates on the market.
By Erin Bendig Published