Savers are finally starting to catch a sliver of a break.
A rise in benchmark interest rates has been stabilizing and even increasing yields on popular savings products, while key borrowing rates were, on balance, either unchanged or down slightly from last month.
Benchmark interest rates continued rising over the last month to hit levels not seen on a sustained basis in almost a year. The yield on the 10-year Treasury note recovered sharply after a post-presidential election nosedive, jumping to 1.91% from 1.76% a month ago (and from 1.58% as recently as Dec. 6).
Indeed, the 10-year of December, something it hasn’t done since the spring of 2012. Heck, until this month, it hadn’t closed above 1.9% since May of last year.
The Federal Reserve’s plan to smother the yield curve — keeping both savings rates and borrowing costs at historic lows — took a step back after meeting notes revealed that some members of the bank’s rate-setting committee foresee an end to the Fed’s bond-buying program sooner than the market anticipated.
That helped to further stabilize or even lift rates on a number of popular savings products, which essentially offset any rate changes on borrowers’ side of the ledger.
Indeed, savings rates have definitely stabilized after months of trending downward. The national average interest rate on a money market account rose to 0.5% as of Jan. 25, up from 0.49% a month ago. It was the first time the rate budged since September, according to data from Bankrate.com (NYSE:RATE).
Meanwhile, yields on jumbo money market accounts continued to stand firm. The national average of 0.64% was once again unchanged from a month ago. The average rate has now held firm for four consecutive months, following a three-month downtrend that saw it slip from 0.66% in August to 0.65% in September to 0.64% in October.
Elsewhere, rates were either unchanged or ticked up. Here are annual percentage yields on some popular savings products as of Jan. 25, according to Bankrate:
- National Average Rate on Interest Checking Account: 0.53%, unchanged for two straight months
- Best Rate on Savings Account: 1% (Barclays [NYSE:BCS] no minimum), no change from a month ago
- Best Rate on 1-Year CD: 1.05% (Colorado Federal Savings Bank, $5,000 minimum), up from 0.97% (Ally Bank, no minimum) a month ago
- Best Rate on 3-Year CD: 1.3% (Barclays, no minimum), up from 1.24% (CIT Bank [NYSE:CIT], $1,000 minimum) a month ago
- Best Rate on 5-Year CD: 1.7% (Barclays, no minimum), unchanged from a month ago
- Best Rate on 5-Year Jumbo CD: 1.85% (CIT Bank, $100,000 minimum), no change for second consecutive month
At the same time, although rates on some of the most common mortgage products were unchanged or moved slightly against borrowers since last month (albeit from historic lows), costs to borrow on homes eased significantly.
Here are the average national rates offered on popular loan products as of Jan. 25, according to Bankrate:
- 30-Year Fixed Mortgage: 3.46%, up from 3.45% a month ago
- 15-Year Fixed Mortgage: 2.84%, unchanged from a month ago
- 5/1 Adjustable-Rate Mortgage: 2.81%, down from 2.85% a month ago
- 30-Year Fixed Mortgage, Refi: 3.51%, up from 3.41% a month ago
- $30,000 Home Equity Line of Credit: 4.54%, down from 4.57% a month ago
- $30,000 Home Equity Loan: 5.47%, down from 5.53% a month ago