This November, your savings account rate could change for the best. Why? The Federal Reserve increased the federal funds rate by three quarters of a point (or 0.75%) on Nov. 2, marking the sixth rate increase in 2022.

Banks and credit unions will raise the rates of savings accounts and certificates to deposit after a Fed rate rise. Rate changes can vary from institution to institution so there is no guarantee that you will see a rate increase. This article will provide information about the November Fed Rate and an overview of the most recent rate changes to bank accounts.

Savings rates and Basis points

The U.S. The Federal Reserve, also known as the Fed, is the U.S. central bank. It is responsible for maintaining a stable and growing economy. The federal funds rate (or Fed rate), is one of its tools. It is the cost to borrow overnight cash between banks. To curb inflation, the Fed increases the rate.

Basis points are used to measure the Fed rate hike. One basis point equals 0.01% or one hundredth of 1 %. This latest increase is 75 basis points or 0.75%. This latest increase puts the Fed rate in mid-3% territory.

Banks and consumers will be more likely to borrow if the Fed rates rise. However, banks tend to raise rates on savings accounts, and new CDs. Find out more about the Fed’s effect on savings accounts.

Bank accounts with better rates may have

After a Fed rate hike, three types of bank accounts will have higher rates: regular savings accounts and CDs. However, checking accounts don’t always earn any interest. Even when they do earn interest, they don’t often see rate increases that are comparable to the rest.

Take a look at the four average national rates charged by banks in the past two months. The March rate was the first increase in the Fed’s interest rate this year. October followed several Fed rate hikes.

Account type

March 2022 National Average Rate

October 2022 national average rate


CD for a 1 year term

56 basis point (0.56%).

Money market account

15 basis point (0.15%).

Regular savings account

15 basis point (0.15%).

Interest checking account

1 Basis point (0.01%).

Source Federal Deposit Insurance Corp.

While regular savings accounts and money markets have similar rates, the minimum balance requirements for these accounts are usually higher. CDs offer the best yields, but they also have the most restrictions. A CD locks in a fixed rate and you cannot withdraw money or add to it until the term ends. There is usually a penalty if you break a CD before the term ends. Learn more about CDs and the Fed rate’s effect on them.

… and how you bank matters

The yields on the national average are not the highest you can get. Online credit unions and banks have dramatically increased the rates of high-yield savings accounts, and CDs, this year. Accounts that yield more than 3% annually can be found, while CDs with 5-year terms may offer a 4% annual percentage yield.

These online banks and credit unions are also among the first to raise rates following a Fed rate rise, as NerdWallet observed.

“If the Fed keeps raising interest rates, bank rates could move higher,” said Sayee Srinivasan (chief economist at the American Bankers Association) in an email. However, “often with some lag,” he stated. “Banks experienced a surge of deposits as a result of government stimulus programs to counter the effects from the pandemic. However, those deposits started to fall .”

Banks that require more deposits will typically raise their savings rates. Not all banks will respond in the same way. However, the three largest national banks have the lowest rate possible — 0.01% — on basic savings accounts. Their CD rates aren’t much better.

With the economy changing so much in the last year, you might want to reevaluate your savings strategies. This could include a high-yield savings or CD account, or both, according to Dana Twight (certified financial planner) and owner of Twight Financial Education, based in Seattle.

More Fed rate hikes are coming?

The short answer is yes. According to the Fed’s September press release, it predicted that Fed rates would continue to rise and will be “appropriate” at its December 13-14 meeting.

Experts believe that more rate increases will be coming.

Srinivasan stated in an email that “In its September Forecast, ABA’s Economic Advisory Committee composed of chief economists of major banking institutions across North America expected the Fed will continue raising interest rates up until the first quarter next year before possibly lowering rates through 2023.” Everything depends on whether the Fed can bring down inflation .”