The Fed's latest decision is leaving open a window of opportunity that many Americans may be ignoring
Fed Chair Jerome Powell confirmed what markets already suspected on Wednesday, leaving the benchmark rate unchanged, despite pressure from President Donald Trump.
With no Fed meeting scheduled for August, all eyes are on the possibility of a September rate cut. But the time between now and then may be the last opportunity for consumers to take advantage of an opportunity created by elevated interest rates.
A study from savings marketplace Raisin said that 84% of Americans do not actively search for better savings rates, even if they could be saving substantially by opting for a different annual percentage yield.
The study found that many American households have the potential to save substantially.
"The average APY on Americans' savings accounts is .58% but they could be earning upwards of 4% APY — which amounts to nearly 7x more in interest each year," the study said, adding that the difference for a household with $10,000 in savings amounts to earning $400 versus $58.
Put simply, if every American household were to opt for higher-yield savings, it could lead to as much as $396 billion per year for consumers.
"Rates really start to come down once we get into the fall," Shana Hennigan, chief business office at Raisin, told Business Insider. "With that backdrop, while consumers still have the opportunity, this might be the time to strike."
If Powell and the central bank cut rates in September, the window to see that kind of yield on savings accounts could be closing.
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