It’s been a roller-coaster ride for rates during the past few years.
But after nearly three years of rate increases and then three rate cuts in the second half of 2019, rates are expected to resemble more of a lazy river in 2020.
Many top-yielding savings accounts decreased APYs in anticipation of, or in response to Fed rate cuts. But generally they haven’t decreased a full 75 basis points, as the Fed did with three 25 basis point decreases between July 31 and Oct. 30 of 2019.
“So as we’ve looked across the board, there’s a pretty wide range in terms of some banks have probably only lowered 25 or 30 basis points, so far,” says Adam Stockton, director of consumer pricing at Novantas.
Stockton says there’s a set of banks that have decreased APYs 50 or 60 basis points. And there’s a set that have already lowered 75 basis points.
“I think given that, we wouldn’t be surprised to see some continued rate decreases moving forward,” Stockton says.
There are two reasons Stockton says that some banks haven’t decreased APYs the full 75 basis points. One is to keep their APYs competitive and the other is uncertainty in the market.