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Your Evening Briefing: Interest Rates Are Finally Rising for Savers

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Currency Exchange Store As Yen Plunges
Photographer: Toru Hanai/Bloomberg

Online high-yield savings accounts became popular in the last few years as a low-risk way to keep cash liquid while still generating a return higher than traditional savings accounts. Now, some rates are climbing as savers battle inflation. Goldman Sachs’s consumer bank Marcus, along with similar options from firms including Barclays and Ally Bank, generally follow the trajectory of the two-year Treasury yield, with a lag. That meant high-yield savings rates plunged in 2020, as the Federal Reserve eased monetary policy to stimulate the economy. Now, as the central bank raises benchmark rates to curb inflation, online banks are following suit. Marcus is now offering the best interest rate for its high-yield savings account since the pandemic began, raising its annual percentage yield to 1.7% from 1.5% at the end of July. The recent move catapults Marcus above its competitors, which previously raised rates more aggressively this year. Ally Bank provides a 1.6% annual percentage yield, while Barclays and Synchrony Bank offer 1.65%. 

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