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Expect savings and money market account yields to slide lower this year, but they still should outpace inflation, according to the latest forecast from Bankrate chief financial analyst Greg McBride.
McBride believes savings and money market yields will be 3.8 percent annual percentage yield (APY) for top-yielding nationally available accounts at the end of 2025; that’s 1.25 percentage points (or 125 basis points) lower than the highest yield at the end of 2024. Meanwhile, the national average yield is projected by the end of 2025 to be 0.35 percent APY for savings accounts and 0.4 percent APY for money market accounts.
McBride expects three, 25 basis-point rate cuts from the Federal Reserve in 2025. The Fed, however, is currently projecting two cuts for the year. But, according to McBride, if inflation stays lower as expected, it will be another banner year for savers. “Any periods where yields were outpacing inflation tend to be pretty short-lived,” McBride says.
As interest rates slip a little bit, I think there’s a natural inclination to think that the situation is deteriorating for savers. But in reality, it’s still going to be a very good year and if inflation were to fall faster than deposit yields it would actually be an even better year.
— Greg McBride, CFA, Bankrate Chief Financial Analyst
Bankrate’s key savings and money market account insights and 2025 forecast
What happened to savings account and money market account rates in 2024?
The Federal Reserve decreased its benchmark federal funds rate three times in 2024, starting on Sept. 18. It cut rates by 50 basis points in September and 25 basis points each in November and December. The Fed raised rates 550 basis points from March 2022 to July 2023 and lowered rates by 100 basis points in 2024.Â
Rate decreases and relatively stable inflation were a win for savers
The difference between 2022, which featured some large and frequent rate increases, and 2023 for savers was inflation. In 2023, inflation came down to levels closer to normal – marking a time when top savings yields were outpacing inflation. Top money market yields were also outpacing inflation.
And in 2024, there weren’t any rate increases, but savers benefited from the 550 basis points of rate increases from previous years and lower inflation that stayed relatively stable.
Since March 2023, the top savings yield has been outpacing inflation. This is very different from June 2022, when inflation was at 9.1 percent and the top savings yield was only around 1.61 percent APY at that time.
Next steps for consumers
Consumers earning anything near or below the current national average of 0.48 percent APY for savings accounts and 0.47 percent APY for money market accounts should shop around and find a competitive yield – and the account that’s right for you. You should be able to find an account that doesn’t have a minimum opening deposit requirement or a monthly service fee – so these accounts are for most people.
Money market accounts are a type of savings deposit account. Some might have the additional convenience of check-writing privileges, which is an uncommon feature in a savings account.“If you have that separated into a high-yield savings account, it helps reinforce the savings habit because it’s off by itself, and it’s generating a higher level of interest earnings that can help reinforce the good savings habits,” McBride says.
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