![]() This higher cost of borrowing decreases the overall demand for goods and services and, in turn, slows the inflationary pressure on prices. ![]() As the Fed increases the federal funds rate, interest rates on credit cards, mortgages and auto loans typically rise accordingly. It’s one of the most important financial policies set by the Federal Open Market Committee (FOMC) and serves as a benchmark for interest rates across the economy.Ĭhanges to the federal funds rate can have a far-reaching impact on consumer borrowing costs. The federal funds rate is the interest rate at which depository institutions-such as banks and credit unions-lend reserve balances to other depository institutions overnight. But before we predict how high savings interest rates could go later in 2023, let’s review some savings rate fundamentals. And this trend may continue as the Fed makes further attempts to get inflation under control. Over 19 months, the national savings interest rate has increased sevenfold. Here’s an overview of the national savings interest rates starting in April of 2022: If you’re wondering when savings rates will go up, you’ll be pleased to know they’ve been rapidly climbing since last year.
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