Interest Rates Are Headed Down Later in 2024, But Your Savings Account Interest Rate Should Not Have Fallen Yet

At the Fed’s March 2024 meeting Jerome Powell reaffirmed that the Fed is not cutting interest rates until it has further information and continued to guide towards three quarter-point cuts in the Fed Funds rate before the end of 2024. In the days that followed, the Treasury curve has contracted with interest rates on the 6-month coming in by about 8 basis points and on the 2-year by as much as 18 basis points.

But, overnight rates have remained the same and will be the same until the Fed actually moves (which may or may not come at the conclusion of its May or June meetings).

While it is perfectly logical that some banks would be cutting their CD offerings (and will continue to cut their CD offerings), it is unfortunate that some banks have already cut their savings rates. We count Ally, Discover and Milli among those that recently lowered their savings rates, and some online banks like Valley Direct and ConnectOne lowered their savings rates earlier in the year.

If you are in a bank that is lowering their savings or money marke rates already, it could be a good time to consider moving your cash to a one that not as eager to lower rates. BestCashCow's savings tables now display the last rate change and the change history. Using this table will enable you to see which rates are most sticky.

Alternatively, it may make sense to lock in a high CD rate now.