The Federal Reserve's projections for 2025 suggest a 'higher for longer' interest rate environment, potentially benefiting savers. Experts discuss the implications for high-yield savings accounts, money market funds, and certificates of deposit.
The Fed eral Reserve in December projected fewer interest rate cuts for 2025. Yields on high-yield savings accounts, money market funds, certificates of deposit and other cash-like accounts should benefit from this 'higher for longer' rate environment. 'If you've got your money in the right place, 2025 is going to be a good year for savers — muchReturns on cash holdings are generally correlated with the Fed 's benchmark interest rate.
If the Fed raises interest rates, then those for high-yield savings accounts, certificates of deposit, money market funds and other types of cash accounts generally rise, too. The Fed increased its benchmark rate aggressively in 2022 and 2023 to rein in high inflation, ultimately bringing borrowing costs from rock-bottom rates to their in September. However, Fed officials projected this month that it would cut rates just twice in 2025 instead of the four it had expected three months earlier. 'Higher for longer is the mantra headed into 2025,' McBride said. 'The big change since September is explained by notable upward revisions to the Fed's own inflation projections for 2025.' higher interest rates can help individuals of all ages and stages build savings and prepare for any emergencies or opportunities that may arise — that's the good news,' said Cheng, who is a member of CNBC's By comparison, top-yielding accounts paid about 0.5% in 2020 and 2021, he said.Money market fund interest rates vary by fund and institution, but top-yielding funds are generally in the 4% to 5% range.The most competitive returns for high-yield savings accounts are from online banks, not the traditional brick-and-mortar shop down the street, which might pay a 0.1% return, for example, McBride said.People always question which is better, a high-yield savings account or a CD, Cheng said. 'It depends,' she said. 'High-yield savings accounts will provide more liquidity and access, but the interest rate isn't fixed or guarantee
Interest Rates Savings Fed 2025 Personal Finance
United States Latest News, United States Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Higher Interest Rates 'Higher for Longer' in 2025: Good News for Savers, Bad News for BorrowersThe Federal Reserve projects a slower pace of interest rate cuts in 2025, signaling a 'higher for longer' interest rate environment. While this benefits savers, borrowers face increased costs. Experts weigh the implications for consumers.
Read more »
My Hero Academia: Vigilantes Anime Gets April 2025 Premiere & Final Season Set for Fall 2025My Hero Academia, one of the most popular anime franchises in recent years, is getting both a spin-off anime and its final season. The spin-off, My Hero Academia: Vigilantes, will premiere in April 2025. The final season of the main series is set to air in autumn 2025
Read more »
14 lessons from 2025 to remember in 2025: BofA14 lessons from 2025 to remember in 2025: BofA
Read more »
Edmunds hybrid sedan comparison: 2025 Honda Civic vs. 2025 Hyundai ElantraSimilar in size and fuel economy, these two hybrid compact sedans differ from there.
Read more »
Edmunds hybrid sedan comparison: 2025 Honda Civic vs. 2025 Hyundai ElantraSimilar in size and fuel economy, these two hybrid compact sedans differ from there.
Read more »
Edmunds hybrid sedan comparison: 2025 Honda Civic vs. 2025 Hyundai ElantraSimilar in size and fuel economy, these two hybrid compact sedans differ from there. The 2025 Honda Civic Hybrid boasts much stronger performance and a higher-quality cabin, while the 2025 Hyundai Elantra Hybrid provides more features for the money and better tech. There are advantages for both, but when the Civic is ahead, it’s ahead big time.
Read more »