If you’re carrying a lot of high-interest debt, the fact that the Federal Reserve once again did not cut interest rates at its Wednesday meeting may be disappointing, if not surprising. However, if you have any savings, the Fed’s unwillingness to lower rates until it sees more consistent progress in inflation data has – and will continue to – put money in your pocket this year if you seek out federally insured accounts with the highest rates.
In 2023, savers made $315.4 billion in interest in deposit accounts, four times the $78.7 billion they earned in 2022, according to data from the Federal Deposit Insurance Corporation. This significant increase in interest earnings can be attributed to the Fed’s rate-hike campaign that began in 2022, allowing savers to earn inflation-beating yields on their US domestic deposits, including bank and credit union savings accounts, certificates of deposit, and money market accounts.
Furthermore, yields on Treasury bills have also been very competitive with the higher rates banks are offering and are equally low risk. This favorable environment for savers has provided an opportunity to grow their savings and earn more interest compared to previous years.
