Best Savings Rates at 0.95%, Average Savings Account Rates Increase to 0.49%

Average savings rates increased to 0.49 percent, up from the previous week's average rate of 0.47 percent. A few banks increased their rates this past week which is why the average rate is up  0.02 percent. The best savings account rates this week are at 0.95 percent, maintaining last week's highest rate.

Any large increases won't come until the Federal Open Market Committee increases their key benchmark interest rate, the federal funds rate. The current fed funds rate is in a targeted range of zero percent to one quarter percent. The fed funds rate has been in this range since December of 2008, when it was dropped to a record low in order to combat the effects of the financial crisis and recession.

The FOMC meets again in a few weeks on June 17th and June 18th but isn't expected to announce any increase in the fed funds rate. The FOMC is scheduled to release economic projections right after the meeting. It will be interesting to see if May's economic projections will be difference from March's. The March projections (central tendency projections, which excluded the three highest and three lowest projections) included 2014 GDP growth in a range of 2.8 percent to 3.00 percent, the unemployment rate to be in a range of 6.1 percent to 6.3 percent, and inflation to be in a range of 1.5 percent to 1.6 percent.

Projections for when the fed funds rate will be increased is all over the map. Though a majority of Fed participants believe the rate will be increased sometime in 2015, projections are for the rate to be anywhere between 0.25 percent and as high as 3.00 percent. Since deposit rates are tied to the fed funds rate, deposit rates will move higher once the fed funds rate is increased.

We will have to wait until sometime in 2015 to see a majority of banks and credit unions increase savings rates, money market rates, and CD rates. Before then, we will see some banks increase rates but the increases won't be substantial. The past couple of weeks two banks, GE Capital Retail Bank and EverBank, increased some of their CD rates but their variable interest rates remained the same.

Best Savings Rates May 27, 2014

• GE Capital Retail Bank Optimizer Plus Rate 0.95%
• CIT Bank Rate 0.95%
• GE Capital Bank Rate 0.90%
• Barclays Bank Rate 0.90%
• The Palladian Private Bank Rate 0.90%
• Ally Bank Rate 0.87%

Best Money Market Account Rates May 27, 2014

• Sallie Mae Rate 0.90%
• Ever Bank Rate 0.86%
• GE Capital Retail Bank Optimizer Plus Rate 0.85%
• Mutual of Omaha Bank Rate 0.85%
• Union Federal Savings Bank Rate 0.85%
• Ally Bank Rate 0.85%