The Federal Reserve’s continuing interest rate hikes are of obvious concern for borrowers, affecting their rates on everything from credit cards to home loans. But for savers, these interest rate hikes mean new chances to reap higher returns on their savings.
“For somebody looking for return on their funds, this is a silver lining,” says Julie Ranson, vice president and district manager at First Fed’s Fairhaven branch.
How to Save More
With money market accounts, interest rates are typically several points higher than interest-bearing checking and savings bank accounts, allowing a greater return on savings. For those with higher balances, money markets allow people to save at a higher rate than a standard savings account while offering flexibility to withdraw as needed.
First Fed is offering a money market special for new accounts with a deposit of $10,000 or more of “new money” – funds not previously held with First Fed in the last 30 days. On January 2, 2023, the account converts to Spruce Money Market.
First Fed is also offering fantastic certificate of deposit (CD) specials. A CD is a particular type of deposit account that earns a fixed interest rate for a fixed term. Because that lump sum of money stays in the account for a set time period, banks can offer much higher interest rates than they do for standard interest-bearing savings accounts.
CDs provide even better interest returns than money market options, but funds are deposited for locked-in terms, meaning that early withdrawals can trigger penalty fees. So CDs are best for longer term savings growth.
Right now, First Fed is offering a terrific 1.75% APY* for a 13-month CD with a minimum deposit of $10,000 in new money. Currently, standard fixed rate CDs range from 46 days at 0.05% to 5 years at 1.30%.
Even better, a 30-month CD offers a 2.00% APY* with a minimum deposit of $25,000 of new money and can include existing First Fed deposits beyond the new $25,000. This special also includes a “bump rate option,” where account holders can bump up their interest rate once during the 30-month term if rates should go higher.
First Fed CDs also offer no monthly service fees and daily interest compounding to maximize interest-earning potential.
“These are really great rates that reflect the rising rate environment,” Ranson says. “First Fed is one of the first banks to move on it. Also, the ability to bump your rate is a great feature so you can take advantage of any significant rate increase.”
So, if making your savings work better sounds good to you, consider stopping by a Whatcom County First Fed branch today!
*APY is Annual Percentage Yield. First Fed is a member FDIC and equal housing lender.