As interest rates go up, 2023 is shaping up to be a good time for savers who stand to earn more money on their cash.
As the unemployment rate hit a 53-year low in the latest jobs report, the interest rate increases are expected to keep coming. The next increase may come in March, according to Greg McBride, chief financial analyst at Bankrate.com.
“The benefit to savers isn’t just the fact that rates are rising,” McBride said. “Your biggest win in 2023 is going to come from inflation coming down.”
As high prices subside, the after-inflation return on cash is poised to get a lot better this year than it has been for savers in the past couple of years, he said.
When it comes to deciding where to put their money, savers have several options.
Primis Bank’s online savings account last week became the first to top 5% in recent years, with a 5.03% annual percentage yield.
“It’s been exactly 15 years since we’ve seen 5% on a savings account,” dating back to February 2008, McBride said.
As interest rates rise, more savings accounts will reach — and surpass — that 5% mark in the next couple of months, McBride predicts.
“Every day we see the bar being raised and more banks increasing their pay outs,” McBride said.