Overview

• The Federal Reserve maintained the federal funds target interest rate at 5.25% to 5.50%, the highest in 23 years, influencing high savings and CD rates.
• Digital banks and fintechs offer savings rates over 5% APY, significantly higher than traditional banks.
• Certificates of deposit (CDs) are seeing high yields, with rates soaring past 5% APY for terms ranging from three months to five years.
• The high interest rates on savings and CDs are a result of the Fed's efforts to combat inflation, which remains above the 2% target.
• Despite high consumer and producer price index figures, the Fed has signaled it may not lower rates soon due to ongoing inflation concerns.