Savers Lose Interest In Chasing Rates

Some banks hold rates steady for longer to attract or retain deposits.

- DALVIN BROWN

Ondrei Ronhaar, a 40-year-old energy broker, said that last week a friend suggested he switch banks to grab a higher-yield savings account. He didn't bite. It turned out the rate was only 0.4 percentage point higher than the 3.8% he is earning at Ally Financial.

"We're looking at a few bucks a month," he said.

The hassle of opening a fresh account, with its new account numbers and logins, wasn't worth the trouble, he reasoned. He kept his $10,000 parked at Ally. It has been there since 2023.

Even dedicated rate-chasers are finding that there isn't much reason to hop from bank to bank in search of higher yields. Interest offers aren't quite as competitive as they were before the Federal Reserve started cutting rates in September. Because banks tend to lower their interest rates quicker than they raise them, today's highest rate might not be tomorrow's.

The highest yield on a savings account tracked by Bankrate this month was 4.85%, down from 5.55% over the summer. The national average rate is far lower at 0.48%.