A Fed Rate Hike Won't Help Your Savings Account

The biggest U.S. banks pay as little as 0.01 percent per year to their savings account customers. At that rate, through the magic of compound interest, their deposits will double in, oh, 7,000 years.

In a statement today, the Federal Reserve omitted a pledge to keep rates near zero for a "considerable time" and instead vowed to "be patient" on any rate increases. This suggests it's getting ready to raise interest rates in 2015. That raises hopes that savers will start earning real money on their deposits next year. Unfortunately for diligent savers, higher rates set by Fed Chair Janet Yellen won’t automatically mean higher rates at the bank around the corner. Americans could be stuck earning pennies on their savings well into 2016, even as banks charge borrowers more.