Finding a Decent Savings Rate These Days

Savings account rates and CD rates are so low these days, finding a decent rate is very challenging. Most variable rate accounts like savings accounts and money market accounts are paying rates under 1.50 percent.

The national average rate for a savings account or money market account with balances of $2,500 to $50,000 is around .50 percent. The only benefit to low interest rates these days is mortgage rates, if you’re currently buying a home or refinance a mortgage the low rates are a good thing.

Certificate of deposit rates are higher these days, of course the longer the certificate of deposit term the higher the annual percentage rate and annual percentage yield will be. Current 12-months CD rates are averaging 1.25 percent but you can find CD rates a lot higher than the national average. Current 60-month CD rates are averaging 2.46 percent.

Another option is to deposit your money into an account that will give you a higher rate like a rewards checking account, also known as a high yield checking account. There are certain monthly requirements to have to meet to earn the higher yield, like setup a direct deposit and/or use a debit card a certain number of times per month.

There are several banks that have annual percentage yields of over 4.00 percent for a rewards checking account. There is a website, checkingfinder.com that allows you to search for banks offering rates in your zip code.

As pathetic as deposit rates might be these days, once you factor in the inflation rate, your rate of return isn’t much better or worse than it has been in the past. The personal savings rate has actually gone up over the past year even though interest rates have been going down. The percentage of disposable personal income (DPI) less personal outlays was 4.6 percent in June, compared with 6.2 percent in May. Before the credit crisis, the personal savings rate was zero percent.

MonitorBankRates.com has tools to help you get a better rate of return from your money. Tools including  a CD calculator, CD ladder calculator, CD rate tables, savings account and money market account tables.