Average savings account interest rates hover around 0.45%, even as prime lending rates for borrowers soar.
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Savings account rates used to follow prime rates, but this correlation has broken in the last 18 months.
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Major banks focus on branding and advertising rather than offering competitive savings rates.
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Many customers stick with their banks for years, creating a "sticky" customer base.
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Savers can find options that offer 4% or 5% interest on their deposits, potentially adding hundreds of dollars annually.
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Big banks have an abundance of deposits due to the pandemic and stimulus efforts.
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Online banks and lesser-known institutions offer higher interest rates with FDIC insurance.
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An alternative to traditional savings, money market accounts offer competitive rates, with some reaching 4% to 5%.
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Banks offer CDs with attractive rates, favoring shorter terms due to expectations of falling rates.
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These options carry minimal risk, making them appealing for savers seeking higher interest.
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