BankRate: Yields Will Outpace Inflation
BankRate writes, "Savings and money market account rates forecast for 2025: Yields will dip but remain higher than inflation." The article says, "Expect savings and money market account yields to slide lower this year, but they still should outpace inflation, according to the latest forecast from Bankrate chief financial analyst Greg McBride. McBride believes savings and money market yields will be 3.8 percent annual percentage yield (APY) for top-yielding nationally available accounts at the end of 2025; that's 1.25 percentage points (or 125 basis points) lower than the highest yield at the end of 2024. Meanwhile, the national average yield is projected by the end of 2025 to be 0.35 percent APY for savings accounts and 0.4 percent APY for money market accounts." It states, "McBride expects three, 25 basis-point rate cuts from the Federal Reserve in 2025. The Fed, however, is currently projecting two cuts for the year. But, according to McBride, if inflation stays lower as expected, it will be another banner year for savers. 'Any periods where yields were outpacing inflation tend to be pretty short-lived,' McBride says." The piece adds, "[I]n 2024, there weren't any rate increases, but savers benefited from the 550 basis points of rate increases from previous years and lower inflation that stayed relatively stable. Since March 2023, the top savings yield has been outpacing inflation. This is very different from June 2022, when inflation was at 9.1 percent and the top savings yield was only around 1.61 percent APY at that time."
