Low Savings Account Rates Until 2015

All types of bank product rates continue to make new lows. Savings rates, CD rates and mortgage rates have all made record lows this year with no end in sight to the declines.

Current average savings account rates are at 0.53% for account balances of $10,000 or more. The FDIC's average savings rate is even lower at 0.10%. There are savings rates available that are higher than the averages but don't expect much.

One of the best savings rates around these days is from CIT Bank. The bank's current savings rate is 1.04% with an APY of 1.05%. A rate just above 1.00% isn't much when you think back to 3 or 4 years ago when you could find a savings rate of 3 percent to 5 percent. When compared to the averages, 1.05% sounds a lot better.

Barclays Bank, the big British national bank, is another bank offering a savings rate almost 10 times the FDIC average and about double the average reported by monitorbankrates.com. Barclays' current savings rate is 1.00% with an APY of 1.00%.

Unfortunately low interest rates are here to stay for 2 to 3 more years. The driving factor behind these low rates is the Federal Open Market Committee. The FOMC's current monetary policy is to keep the Fed funds rate near zero percent to foster growth and lower unemployment, which is the Fed's mandate.

In the last meeting in April, the FOMC decided that economic conditions, including low rates of resource utilization and a subdued outlook for inflation over the medium run are likely to warrant exceptionally low levels for the federal funds rate at least through late 2014. This is Fed's way of saying low interest rates are here to stay until at least 2015.