Highest Savings Account Rates Remain at 1.00 Percent as Sequestration is Here to Stay
The highest savings account rates remain at 1.00 percent and bond yields have risen this week because no last minute deal was made in Washington to stop the budget cuts. People who are not directly affected by sequestration seem to think it's not so bad but if you're receiving unemployment benefits, you'll see a reduction right away and federal employees can expect furloughs.
At this point, bond yields haven't reacted positively or negatively since sequestration hit on March 1 at noon. Equity prices have been rising this week and the Dow hit an all-time record high yesterday. Apparently, the markets are not concerned about sequestration and the effect on the economy at this point.
Whether or not the government spending cuts will really hurt the economy overall remains to be seen. If the cuts have a real negative effect, interest rates and bond yields will move lower from current levels. 10 year U.S. Treasury yields are averaging 1.97 percent, up 7 basis points this morning. While Treasury yields are higher this week, average savings account rates remain unchanged at 0.07 percent in the FDIC's rate survey for the week ending March 4, 2013.
Average jumbo savings rates are also unchanged at 0.07 percent this week. The best savings rates on jumbo savings accounts are also unchanged this week at 1.00 percent. Gone are the days when a jumbo savings account earned you a higher rate and yield than a regular savings account. Chances are that will change in the future when all interest rates move higher.
Average money market account rates in the FDIC survey are averaging 0.10 percent, down from last week's average money market rate of 0.11 percent. Average jumbo money market rates are averaging 0.16 percent, down from last week's average jumbo rates of 0.17 percent.
The best money market rates this week are still at 1.25 percent. Everbank is offering their promotional money market rate for six months at 1.25 percent. Once the promo period is over, the regular money market rate is 0.76 percent. The combined first year APY on EverBank's account is 1.01 percent, which is also the best rate in our database this week.
The highest savings rates in our database this week at 1.00 percent are from Barclays Bank and CIT Bank, right below the highest money market rate. In fact, we list many banks in our database that are offering both savings rates and money market rates well above the FDIC's average rate.
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