Savings account interest forecast for spring 2024: Here's what experts predict

Amidst the most recent Bureau of Labor Statistics data showing prices rising at 3.2% per year, the Federal Reserve held rates steady at its March 2024 meeting. While inflation isn't nearly as hot as it was recently, it's remained stubbornly above the Fed's 2% target. Although many consumers want inflation to slow down, the benefit has been that interest rates for savings accounts have been high, as there's typically a direct correlation between savings interest rates and the fed funds rate.

However, at the last Fed meeting, the central bank still indicated that it expects to cut rates three times this year, so savings account interest rates might not stay high for long. That said, most experts agree that savings account rates will stay relatively high through most of the spring, with differing expectations as to when rates will start to fall. Below, we'll break down their current predictions.

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Savings account interest forecast for spring 2024

Here's what the experts we spoke to predicted for savings rates in the months to come.

Rates could start to fall around June

Many experts predict that the Fed will begin cutting rates following its June 12 meeting, with the CME FedWatch tool showing a 75% likelihood of rate cuts then.

"Interest rates overall are still high, and we are seeing savings rates holding at higher rates across financial institutions. I would expect savings rates to remain higher for this spring, but they may begin to decline if the Federal Reserve Board elects to start bringing the federal funds rates downwards," says Chikako Tyler, chief financial officer and founder of the Banking on Women at California Bank & Trust.

Still, the savings account interest rate forecast could remain positive past this spring for savers, even if rates start to fall.

"For most consumers, the answer is that it probably doesn't matter much. Rates are at a 20+ year high, and even factoring in small decreases over the coming year, rates will remain incredibly strong. But that only matters for people who are earning a competitive interest rate," says Max Lane, CEO of Flourish, a financial product platform.

As Lane points out, many consumers aren't taking advantage of high interest rates and instead have kept their money in savings accounts that have low rates compared to high-yield savings accounts that are paying above 4% or even 5% or more in some cases. Compare that to a regular savings account, which currently only pays 0.47%, according to the FDIC.

"That should be a typo, but it's not. The fact is that most Americans are earning closer to zero than the Fed target rate," says Lane. "If you do just one thing to meaningfully improve your financial situation this year, it's this: Move your cash to a high-yielding, FDIC-insured account. The time and effort are minimal, and it's basically free money."

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Rates could hold steady past the spring

An even greater incentive to move money into a high-yield savings account could be that rates won't necessarily start falling in June. Some experts foresee rates remaining higher for longer.

"My take, which is a bit contrarian, is that rates will stay higher for longer than many people expect. Economists and the Federal Reserve got the 'transitory inflation' call wrong, and I think we are facing a rather challenging period for everyday Americans — sticky inflation, high real estate prices, a rising stock market, unaffordable housing, and ballooning national debt," says Brent Weiss, co-founder and head of financial wellness at Facet, which offers financial planning services.

"There's simply too much money in the system right now, and rates may need to stay high to bring runaway prices down to earth," he adds.

Similarly, Joe Camberato, CEO of National Business Capital, says that he foresees savings rates holding steady through the end of the year. So, for those who want the flexibility to access their cash if need be, while earning a competitive interest rate, high-yield savings accounts remain attractive, notes Camberato.

However, if you don't want to face as much uncertainty around rate changes and instead want to lock in a high interest rate in case rates do fall, then you might prefer other savings vehicles like certificates of deposit (CDs), he says. CD rates for long-term CDs are lower than some high-yield savings accounts, but CDs offer more certainty.

Learn more about your CD options here now.

The bottom line

Although experts differ somewhat on when exactly savings rates will fall, most see savings accounts remaining attractive throughout the spring and beyond. Even if rates start falling in the summer, you can still likely get a good return from a savings account, but look for a high-yield savings account and compare rates to make the best decision.

Some savers, however, might not want to stress about potential rate changes and instead get a guaranteed CD interest rate. Doing so means your money would be less liquid, but you don't have to face potential fluctuations in interest rates during the CD term.