Brick-and-mortar banks are paying rates that are far below the Federal funds rate. Here's why — and how to find a better rate.
. It's certainly better than the returns experienced by stock and bond investors this year — with the S&P 500 down more than 20% year to date — but the gap between savings accounts and the Fed's benchmark rate means that savers are falling further behind.
For instance, the average yield for brick-and-mortar savings accounts in February 2019 was 0.2%, compared with the September 21 average of 0.13%. "A lot of people put the extra savings into banks," Tumin noted."For the last decade, there have been so many years of low rates that a lot of consumers have been conditioned to low rates and may not shop around like they used to for higher rates, especially at brick-and-mortar banks where you don't get much benefit for shopping around.