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Savings account interest rate forecast for summer 2024: Everything experts predict

Piggy bank and coins
Given the unusual economic environment, there could be a shift in savings rates over the summer, experts say. Getty Images

The latest Consumer Price Index report reveals that inflation eased in April to 3.4%, ticking down by 0.1% from March. But despite the positive movement, inflation remains elevated, and the Federal Reserve still has work to do to meet its stated 2% target inflation rate.

At one point in early 2024, economists forecasted an interest rate cut after the Federal Reserve indicated it would cut the rate multiple times this year. These anticipated rate cuts were expected to start mid-year, but stubborn inflation has kept any rate drops on hold so far.

While today's elevated interest rates are burdening borrowers with higher lending costs, they're rewarding savings account holders with higher yields. And, given the unusual rate environment, many savers are watching the Fed's next moves intently to see how the agency's actions could affect savings account interest rates this summer. 

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Savings account interest rate forecast for summer 2024: Everything experts predict 

Here's what the experts anticipate might happen with savings account yields in the coming months.

Savings account interest rates will drop

The Federal Reserve doesn't directly set savings rates, but yields generally change with Fed decisions, among other factors. As Stephen Kates, CFP and principal financial analyst at, points out, savings rates can drop before the Fed takes action.

"I believe savings rates will fall, but very slowly. This is dependent on monthly inflation prints, which are most likely going to telegraph Federal Reserve interest rate policy. If inflation does not spike and remains stable or falls, then I expect banks to begin preemptively lowering savings and CD rates in anticipation of a Fed rate cut later this year," Kates says.

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Savings account interest rates will stay the same

Expert consensus increasingly leans toward the Fed pausing interest rates this summer as it waits for more consistent data pointing to cooling inflation. Accordingly, savings rates could remain at high levels

For example, the latest average savings rate is 0.45%, according to the FDIC, which includes paltry rates for traditional savings accounts at major nationwide banks. However, credit unions, some banks and many online banks offer substantially higher yields on high-yield savings accounts, ranging from 4.25% to 5.25% or higher on average.

Given the significant disparity in rates, Tyler Schipper, associate professor of economics at the University of St. Thomas, notes that future rate cuts might not be as noticeable at large commercial banks as with online banks.

"The odds are against the Federal Reserve cutting interest rates this summer, barring a series of remarkably good inflation prints," says Schipper. "And bank lending has grown slowly in 2024 — roughly half of its pre-pandemic rate. If rates do start to fall, it will only be noticeable at certain banks, mainly online banks, or in certain types of accounts, such as high-yield savings accounts and certificates of deposit (CDs). The largest banks only offer anemic interest rates on their traditional savings accounts, so there will be little movement there regardless."

Andrew Herzog, CFP at The Watchman Group, also anticipates savings rates will remain steady this summer. 

"The Federal Reserve has five more meetings before Christmas, and I certainly do not expect a rate cut in June, especially after recent Fed minutes indicated worries that inflation was too sticky and not enough progress was being made to achieve the 2% target," Herzog says. "I see no change this summer because savings interest rates are going to be mostly affected by Fed decisions. Come the end of the year, however, perhaps rates increase all around due to a lack of progress on inflation."

Savings account interest rates could rise

While Herzog believes saving rates will remain the same, he notes that banks also adjust savings yields according to their need for deposits to lend to their borrowers.

"Savings account interest rates could also increase if banks want to entice new deposits and revitalize consumer spending through the loans they give out," says Herzog. "Recent news shows some retailers — Amazon, Walmart, Target — slashing prices to entice consumer spending again, so it's plausible that banks could voluntarily step up savings account rates on their own to rejuvenate the economy and increase their revenue."

The bottom line

Most experts expect the Fed to continue holding interest rates steady, which could bode well for savings account holders enjoying high yields. If you want to maximize your savings rate, you might consider parking your money in a high-yield savings account. As its name suggests, these accounts earn strong yields but are also highly liquid.

Certificates of deposits (CDs) and bonds may be a better option if you want to lock in today's rates for the long term. For example, opening a 3- to 5-year CD today could be a wise move if you anticipate rates dropping in the future. Of course, if rates increase, you could miss out on higher yields, so weigh the potential benefits and risks before proceeding.

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