8 Banks Now Offering Deposit Rates at 1.00 Percent or Higher

There are now 8 banks on our variable deposit rate list offering rates at or above 1.00 percent. GE Capital Bank and My Savings Direct have the best savings rate at 1.04 percent with an APY of 1.05 percent. The savings rate at GE Capital Bank was recently increased from 1.00 percent.

EverBank has the top money market rate with 1.01 percent APY. I should note, the EverBank MMA has an intro period of 1.40 percent for 6 months, then the rate falls to 0.61 percent. The first annual percentage yield combined is 1.01 percent.

We don't anticipate variable interest rates to move much higher from current levels until the Federal Reserve increases the fed funds rate. The current fed funds rate has been in a targeted range of zero percent to one quarter percent since December 2008.

You can view average variable deposit rates to the right:

There is a debate raging about when the Fed will increase the rate. Until Friday's lackluster jobs report, we forecasted the first rate hike in over 6 years was going to happen in June. Now there is a chance we won't see an increase until the Fed's September meeting.

The April and May jobs reports will be the deciding factor on when the rate is increased. Better than expected job growth or wage growth will cause the Fed to increase the rate in June. Weak reports will force the Fed to wait until September.

Exactly when the fed funds rate is increased is still not certain but you can bank on the increase being only 25 basis points. A 0.25 percent increase will force the highest savings rates and money market rates towards 1.30 percent. The best 1 year CD rates which are around 1.30 percent right now will head towards 1.55 percent.