Here's exactly why the interest rate on your high-yield savings account keeps falling - Business Insider

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If you have a high-yield savings account, you may have noticed your APY has decreased in recent months

Two crossed lines that form an 'X'. It indicates a way to close an interaction, or dismiss a notification.Personal Finance Insider writes about products, strategies, and tips to help you make smart decisions with your money. We may receive a small commission from our partners, like American Express, but our reporting and recommendations are always independent and objective.The Federal Reserve has lowered the federal funds rate, so high-yield savings account rates are going down, too.

When the Federal Reserve increases rates down the road, your high-yield savings account rate should go up, too.As of August 18, 2020, the best high-yield savings accounts pay 0.75% to 1.21% APY. If you're earning considerably less than this, then you may want to consider switching. Lower rates are discouraging. After all, the entire point of a high-yield savings account is that it earnsWhy are these accounts that are supposed to earn you more interest suddenly earning less than they used to? And how should you respond?In the US, high-yield savings account rates are tied to the federal funds rate set by the Federal Reserve. The federal funds rate is the rate at which banks lend money to each other.

 

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