Savings Rates Continue to Increase, Courtesy of the FOMC

Savings rates, money market rates, and CD rates continue to march slowly higher as we head into the second quarter of 2017. The best savings account rate available this week is from PurePoint Financial at 1.24 percent with an APY of 1.25 percent. PurePoint's current savings rate is more than double the current national average of 0.56 percent.

Last month, prior to the Federal Open Market Committee's fed funds rate increase, the top savings rate was at 1.14 percent with an APY of 1.15 percent. The FOMC increased the fed funds rate 0.25 percent during the middle of March to a range of 0.75 percent to 1.00 percent.

The FOMC's next meeting is scheduled for May 2nd and May 3rd. All though the FOMC has said they are looking to have two more rate increases in 2017, it's unlikely a fed funds rate increase will come during the May meeting. The CME Group's FedWatch Tool puts the chance of a rate increase at only 6.4 percent as of April 2nd.

The next fed funds rate increase is likely to come during the Fed's June Meeting on June 14th and 15th. There is a 58.7 percent change the rate will be increased during the June meeting, according to the CME Group's FedWatch Tool.

A fed funds rate in a range of 1.00 percent to 1.25 percent will likely push the highest savings rates towards 1.50 percent. The highest 1 year CD rates available right now are already at 1.50 percent. The next rate increase will likely put the top 1 year CD rates closer to 1.75 percent.

The good news is that deposit rates are finally headed higher and will continue to move higher in the coming years. As long as economic growth moves higher and the economy doesn't fall into a recession, rates will move higher.