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Some banks are starting to raise returns on high-interest savings accounts to pre-COVID-19 pandemic levels as stocks have recovered after inflation appeared to moderate slightly in August — to 8.5% — amid four straight increases in interest rates by the Federal Reserve.
What Happened: As inflationary pressures are still weighing down most Americans, they’re looking for ways to make the most of their money. Goldman Sachs Group Inc.’s GS consumer bank Marcus can provide some help.
The firm raised its annual percentage yield to 1.7%, up 0.02% from the end of July.
Online high-yield savings accounts, according to Bloomberg, have gained popularity in recent years as a low-risk alternative offering a return that is higher than regular savings accounts.
Marcus, as well as other products from companies such as Barclays PLC BCS and Ally Financial Inc ALLY, typically trail behind the direction of the yield on the two-year Treasury.
Bloomberg noted high-yield savings rates plunged during the height of COVID-19 as the Fed eased monetary policy to stimulate the economy, and as the Fed continues to raise rates to stifle inflation, banks are too.
View the highest real-time interest rates on Benzinga’s high yield online savings account page.
With the recent shift, Marcus has surpassed its rivals Ally Bank, which now offers a 1.6% annual percentage rate, and Synchrony Financial SYF and Barclays, which both provide a 1.65% yield.
How Much Can You Earn With 1.7% APY? Let’s say that you have $5,000 in Marcus. At 1.70% APY, you may make $85 in a year even if you don’t make any additional payments. In the same time frame, you would have made $60 at Marcus’ prior 1.2% APY.
Marcus first raised its rates in April 2022, after 17 months of continued decreases. Interest rates bottomed at 0.50% in November 2020. Its rates peaked at 2.25% in January 2019.
Photo: Watchara Ritjan via Shutterstock
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Image and article originally from www.benzinga.com. Read the original article here.