How interest rates have changed over the last 12 months


Inflation is cooling.

Consumer spending continues to be at record highs, while consumer confidence has been trending up. And, after almost two years of rate hikes by the U.S. Federal Reserve, investors are expecting at least a few cuts to interest rates this year.

Their anticipation is understandable: The federal funds rate hasn’t been this high since the early 2000s, and some experts say it seems like the Fed has achieved its goal of a “soft landing,” taming inflation without tipping the economy into a recession.

But consumers looking to borrow money shouldn’t start celebrating just yet, said Greg McBride, chief financial analyst at Bankrate.

“Interest rates took the elevator going up; they’re going to take the stairs coming down,” McBride said.

As the Fed goes into its first Federal Open Market Committee meeting of 2024, here’s what that elevator ride up has looked like over the last 12 months in five major consumer categories: credit cards, savings accounts, certificates of deposit, auto loans and mortgages.

Credit cards

Savings accounts

But the savviest savers can find rates much higher than that, McBride said.

“The number that savers should be focusing on is actually 10 times higher than that average,” he said. “The top yielding savings accounts are paying well over 5%. Federally insured, available nationwide. You can get to your money when you need it. And many of them are available with no minimum deposit.”

A lot of these are online, high-yield savings accounts that you can open on your smartphone. These accounts can be smart for emergency savings that allow consumers to get their money quickly in a pinch.

Certificates of deposit

“CD yields have peaked,” McBride said. “They’ve already started to ease back, and that’s going to accelerate as the year progresses. So there’s no benefit waiting: You’re not going to get a better yield later.”

Auto loans

McBride expects those rates to come down over the course of this year.

“For car buyers, if you’ve got your ducks in a row, the financing environment is going to be better in 2024 than 2023,” he said.

He cautioned, however, that buying a car is still a major expense, regardless of what interest rates are.

“Car payments are budget busters,” he said. “If you don’t have equity from a previous vehicle and you’re buying a $50,000 or $60,000 vehicle, you’ll be financing that amount. So, even if interest rates were still near zero, that’s going to be a backbreaking monthly payment.”

Mortgage rates

Mortgage rates had a bumpy trajectory in 2023, with the average 30-year fixed rate hitting almost 8% in October.

And while they haven’t fallen back to January 2023 levels, the 30-year fixed rate has been hovering between 6.6% and 6.7% for the last four weeks.


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