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Best Savings Rates Remain at 1.00 Percent as the Federal Reserve Holds Rates Steady

The United States economic outlook is looking brighter and brighter, thanks to a stronger housing market, higher retail sales, and a lower unemployment rate. Forecasts for GDP growth in 2012 are moving up to the 3 percent range, which is quite an improvement from earlier forecasts. Unfortunately, all the rosy news won't translate into higher savings rates any time this year. Right now, the best savings rates remain just above 1.00 percent this week.

Best Savings Rates Remain at 100 Percent as the Federal Reserve Holds Rates SteadyThe FDIC national average savings rates are many times lower than the best rates available. The current FDIC national average savings rate is a paltry 0.08 percent. Jumbo savings rates are not faring any better, also averaging 0.07 percent. There is one reason why savings account rates and all interest bearing deposit rates are low - the Federal Reserve.

The Federal Reserve has kept their key interest rate, the Fed funds rate, just above zero percent for about five year now. The Fed plans to keep this rate near zero percent until the unemployment rate falls below 6.5 percent or inflation is higher than the Fed's long-term objective of 2 percent. The Fed believes the unemployment rate will fall below 6.5 percent some time in late 2015 and that the outlook for inflation will be lower than the 2 percent target rate for the next few years.

If the Fed is correct, that means savings rates, money market rates, and CD rates will also remain low until the end of 2015. This is unfortunate news for people who rely on interest income to live on. The thought of dealing with 2 plus more years of low interest rates isn't great news, especially since we have already been suffering through low rates for about 5 years now.

To help you with your search for finding the highest savings account rates and money market account rates we have compiled a current list of rates below:

Highest Money Market Rates

  1. EverBank 1.01% APY

  2. Union Federal Savings Bank 0.95%

  3. ableBanking 0.85%

  4. GE Capital Retail Bank 0.85%

  5. Seacoast Commerce Bank 0.85%

  6. Ally Bank 0.84%

  7. Discover Bank 0.70%

  8. Virtual Bank 0.70%

  9. 0.65%

  10. AloStar Bank of Commerce 0.60%

Highest Savings Rates

  1. Barclays Bank 1.00%

  2. CIT Bank 1.00%

  3. American Express Bank 0.85%

  4. Mutual of Omaha Bank 0.85%

  5. FNBO Direct 0.85%

  6. Colorado FSB 0.85%

  7. Ally Bank 0.84%

  8. Discover Bank of 0.80%

  9. Heartland Bank Direct 0.70%

  10. AloStar Bank of Commerce 0.50%

Author: Lisa Graham
March 26th, 2013