How do banks determine interest rates on savings accounts?

Banks determine interest rates on savings accounts based on a variety of factors, including the Federal Reserve’s benchmark interest rate, competition with other banks, and the bank’s own financial situation. The Federal Reserve sets a benchmark interest rate, known as the federal funds rate, which influences the rates that banks offer on savings accounts. Banks may also adjust their rates based on competition with other banks and their own financial needs.

Learning financial topics and understand how it actually impacts you personally can be daunting, but our mobile app makes it easier to understand a variety of effects such as interest rates, inflation and taxation on your long-term savings.

Learn more

Similar Questions

What bank gives the highest interest rate?

The bank that offers the highest interest rate can vary depending on the type of account and the location of the bank. Typically, ...

What does miet mean?

MIET stands for “Member of the Institute of Engineering and Technology.” It is a professional membership designation f...

How much money can I save?

The amount of money you can save depends on your income, expenses, and savings habits. To determine how much you can save, you sho...

Ready to get started?

Download our app and start gaining insight into your current and future finances.