What Fed Rate Increases in 2023 mean for savings Accounts? Advertiser disclosure We’re your top priority. Every day. We believe everyone should be able to make sound financial decisions with confidence. While our website doesn’t contain every financial institution or product that is available We’re pleased that the advice we provide as well as the advice we provide and the tools we create are impartial, independent simple, and completely free. How do we make money? Our partners pay us. This could influence the types of products we review and write about (and the way they appear on our website), but it in no way affects our recommendations or advice that are based on many hours of study. Our partners cannot promise us favorable reviews of their products or services. . What do Fed Rate increases in 2023 will mean for Savings Savings accounts Interest rates for high yield savings accounts in 2023 may continue to increase, though not as quickly or as high as the previous year. By Margarette Burnette Savings accounts and money market accounts banks Margarette Burnette is a specialist in saving and has written about bank accounts from before even the Great Recession. Her work has been published in various major newspapers. Prior to becoming a part of NerdWallet, Margarette was a freelance journalist, with bylines appearing in magazines such as Good Housekeeping, and Parenting. She lives near Atlanta, Georgia. Feb 2, 2023 Edited by Yuliya Goldshteyn Assistant editor Yuliya Goldshteyn is a banking editor for NerdWallet. She was previously an editor, writer , and research analyst in a variety of industries, ranging from healthcare and market research. She graduated with a bachelor’s degree in history from the University of California, Berkeley and a master’s in sociology from the University of Chicago. She can be reached at

. A majority or all of the products we feature are made by our partners who compensate us. This impacts the types of products we review and the location and manner in which the product is featured on the page. But, it doesn’t influence our evaluations. Our opinions are entirely our own. Here is a list of and . It’s 2023 and there’s a new Federal Reserve rate. Federal Reserve just announced a Federal funds rate increase of 0.25 percent. This follows seven rate hikes in 2022. The increase has brought the target rate range up to 4.5%-4.75 percentage. The increase is lower than the more dramatic changes in 2022, but an additional increase means that rates are at their highest point since 2007, which was the last time that the target hit 4.75 percent. All of the recent rate increases translate to loans as well as credit card accounts are getting more expensive. But if you have the option of a savings account or certificates of deposit you may gain. Here’s a look at what the recent rate hike could be for savings accounts in 2023. Savings accounts with a 3% APY or more In the early 2022, the top savings accounts earned only 0.50% annual percent yield. Today, the best savings accounts , as well as several of the most popular high-yield savings accounts are at 4percent APY. This is a huge jump in one year. The most recent announcement states an increase that is smaller than most of the 2022 rate increases, don’t anticipate to see APYs that are more than eight times higher. However, you might find yields that are a little higher, and more accounts may achieve the 4% level. Be on the lookout for high-yielding online savings accounts specifically, as they are likely to have the most competitive rates. On the other hand, savings accounts offered by a few of the biggest national banks are charged 0.01%, despite the numerous federal fund rate hikes this year. They are not as high as the average national savings rate, which was 0.33% on January 17, 2023 as per the Federal Deposit Insurance Corp. If you’ve got a savings account with an unsatisfactory rate, it could be worthwhile to shop around for a savings account that earns 3%-4% APY. Shore up savings for the future One of the main reasons why the Federal Reserve has been increasing rates is because it wants to fight inflation. The efforts of last year appear to be paying off. Based on reports from the U.S. Bureau of Labor Statistics, CPI, the index of consumer prices (CPI), which is often used as a measure of inflation, grew 6.5 percent over the course of the year through December of 2022. This figure, though high compared to prior years, is still lower than what it was in the earlier summer, when it was reported that the CPI was 9.1% year over year during June of 2022. If inflation falls inside the Federal Reserve target range in the coming months, rate increases could come to an end. That’s a reason to build up an in a high-yielding account today. There is no way to predict the future however having a solid savings account can help prepare you for financial storm. It’s best to have between three and six months’ worth expenses saved up however that’s quite a bit. If you don’t have as amount of money saved up You can build it up gradually in increments that work for you. Say you receive a paycheck twice per month and you are able to put away $50 each payday. You’ll have over 600 dollars saved in six months, and that could be a great help in an financial crisis. Putting that cash in an account that has a high rate can help you grow your savings. The difference a high-yielding savings account can make where you save your money can have an effect on your balance. If you put your emergency fund of $600 into an account that pays 0.01 percent APY, similar to those is offered by several of the biggest national banks, and didn’t make any further deposits, the account would earn the sum of 6 cents over the course of a year. But if that money was placed in a high yield savings account that earns a 4.00% annual percentage rate even if you did not deposit any more money, the balance would grow to more than $24 in that same time period. This is a profit for selecting a savings account that is better. You can test your own calculations with NerdWallet’s calculators to see what your savings might yield. Fed rate increases are continuing until 2023 — so far. You can take advantage of this by storing your cash in a high-yield savings account. You’ll earn higher rates than with a regular savings account and are better prepared for whatever financial situations come your way. About the author: Margarette Burnette works as a saving account expert at NerdWallet. Her work has been highlighted in USA Today and The Associated Press. On a similar note… Benefit from better rates As rates rise, see our recommendations for the top high-yield online savings accounts. Explore even more deeply in banking. Get smarter money moves – straight to your inbox Sign up and we’ll send you Nerdy articles about the money topics that matter most to you and other strategies to help you make the most out of your savings. Make all the right money moves

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