In June, the Federal Reserve raised interest rates for the second time this year and for the seventh time since it began normalizing rates in December 2015.
Overall, deposit rates have been slow to respond. Even today, you may see little difference in the interest rate of your bank account compared to the time before the first Fed rate hike in 2015. The average savings account yield is now 0.22 percent, which isn’t much higher than the average yield in December 2015 of 0.18 percent.
This average is dominated by brick-and-mortar banks and credit unions. Internet bankshave always offered higher deposit rates due to their lower cost structures, but they have also responded much faster to the Fed rate hikes. At several internet banks this week, it’s possible to earn 2 percent yields on short-term deposit accounts. For those who prefer to bank by physically visiting a branch, it’s still possible to earn 2 percent, but it takes more work.