Interest rates took a wild ride this month, surging on expectations that the Federal Reserve would taper its bond buying program and the receding when the central bank stood pat.
The end result was that September was much kinder to borrowers and savers than August was.
Interest paid on popular savings products either rose or remained unchanged at month’s end, while mortgages and other loan products got a bit cheaper since August.
The yield on the benchmark 10-year Treasury note started the month at 2.84% and soared as high as 2.98% before reversing course — thanks to the Fed’s surprise move of making no policy changes. By the end of Sept. the rate had cooled off all the way back down to 2.64%
On a net basis, the interest rate environment broke against lenders and in favor of consumers.
True, money markets — a popular place to stash cash — fell for the sixth straight month despite the action in benchmark Treasurys. The national average interest rate on a money market account slipped to 0.4% as of Sept. 24 from 0.43% a month ago, according to data from Bankrate.com (RATE).
As recently as April, the national average stood at 0.49% — a level that money markets were essentially stuck at for nine months.
Yields on jumbo money market accounts also resumed their downward trend after stabilizing over the summer. The national average declined to 0.54% as of Sept. 24 from 0.58% a month ago. In June and July the rate held steady at 0.6%. For some recent context, the average jumbo money market rate stood at 0.62% in March after yielding 0.64% from October through February.
Elsewhere, yields on savings products rose modestly — or at least didn’t fall. Here are the annual percentage yields on some popular savings products as of Sept. 24, according to Bankrate:
- National Average Rate on Interest Checking Account: 0.49%, no change from a month ago
- Best Rate on No-Fee Savings Account: 0.9% (Barclays [BCS], no minimum), no change for four months
- Best Rate on 1-Year CD: 1.1% (eLoan, $10,000 minimum), up from 1.05% a month ago
- Best Rate on 3-Year CD: 1.45% (Intervest National Bank [IBCA], $2,500 minimum), up from 1.4% a month ago
- Best Rate on 5-Year CD: 2.05% (iGObanking.com, $1,000 minimum), no change for two months
- Best Rate on 5-Year Jumbo CD: 2.01% (EverBank, $100,000 minimum), up from 1.86% a month ago.
At the same time, almost all of the most common mortgage and home loan products became substantially less expensive, reversing last month’s trend. Here are the average national rates offered on popular loan products as of Sept. 24, according to Bankrate:
- 30-Year Fixed Mortgage: 4.32%, down from 4.55% a month ago
- 15-Year Fixed Mortgage: 3.38%, down from 3.57% a month ago
- 5/1 Adjustable-Rate Mortgage: 3.63%, up from 3.44% a month ago
- 30-Year Fixed Mortgage, Refi: 4.3%, down from 4.53% a month ago
- $30,000 Home Equity Line of Credit: 4.91%, down from 5.05% a month ago
- $30,000 Home Equity Loan: 6.27%, down from 6.31% a month ago