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Deposit Rates Will Continue Moving Higher in 2015
 

Deposit Rates Will Continue Moving Higher in 2015

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Deposit rates have been trending higher for the past couple of months and will continue to move higher in 2015. At the beginning of this year, the best savings rates available from banks and credit unions were at 0.90 percent. The best rates currently available are at 1.04 percent with an APY of 1.05 percent. Though the increase in savings rates in 2014 are small, 2015 will be different.

The sole reason savings account rates and money market account rates will increase in 2015 is that the Federal Reserve will be increasing the fed funds rate. Deposit rates, including CD rates, are all tied to the Federal Reserve's key benchmark interest rate, the fed funds rate. The Federal Reserve is widely expected to increase the rate in 2015 from the current record low of near zero percent.

We forecast for 2015 the highest bank savings rates and credit union savings rates to move towards 1.50 percent by the summer of 2015. By the end of next year, the highest savings rates will head towards 2.00 percent. Some financial institutions might increase savings interest rates above 2.00 percent. The last time savings rates were above 2.00 percent was several years ago.

We also expect money market rates to have the same trajectory as savings rates next year. By the middle of the year, rates will be around 1.5o percent and at 2.00 percent by the end of the year. 1 year CD interest rates will move slightly higher than variable interest rate accounts. The best CD rates on 1 year certificates of deposit will be near 2.00 percent by the summer of 2015 and be between 2.25 percent and 2.50 percent by the end of the year.

Listed below are the current highest variable deposit rates and 1 year fixed certificate of deposit rates for December 3, 2014.

Highest Variable Deposit Rates

  • My Savings Direct 1.04% APY 1.05%

  • EverBank Money Market APY 1.01% Rate 0.61% (6 Month Intro Rate of 1.40%, First Year APY 1.01%)

  • CIT Bank Savings Rate 1.00% APY 1.00%

  • Synchrony Bank Optimizer Plus Savings Rate 1.00% APY 1.00%

  • ableBanking, a division of Northeast Bank MMA Rate 1.00% APY 1.00%

  • iGObanking.com Savings Rate 1.00% APY 1.00%

  • GE Capital Bank Savings Rate 0.95% APY 0.95%

  • Ally Bank Savings Rate 0.90% APY 0.90%

  • Sallie Mae Bank MMA Rate 0.90% APY 0.90%

  • Barclays Bank Savings Rate 0.90% APY 0.90%

  • Discover Bank Savings Rate 0.90% APY 0.90%

  • iGObanking.com MMA Rate 0.90% APY 0.90%


Highest 1 Year Fixed CD Rates

  • BankDirect CD Rate 1.16% APY 1.17%

  • Congressional Bank CD Rate 1.16% APY 1.17%

  • My e-BAnC by BAC Florida Bank CD Rate 1.14% APY 1.15%

  • Sallie Mae Bank CD Rate 1.14% APY 1.15%

  • CIT Bank CD Rate 1.11% APY 1.12%

  • Synchrony Bank Optimizer Plus CD Rate 1.09% APY 1.10%

  • GE Capital Bank CD Rate 1.09% APY 1.10%

  • California First National Bank 1.09% APY 1.10%

  • Colorado Federal Savings Bank 1.09% APY 1.10%

  • Silvergate Bank 1.07% APY 1.08%


Author: Brian McKay
December 6th, 2014