What the Fed rate increase means to you

Although the typical car thrust arrives highs Since 2012, the latest increase is not expected to make a meaningful difference – at least not yet.

“Car loan rates will go up as the Fed raises rates, but it won’t be a problem for car buyers because it has a limited impact on monthly payments,” Mr. McBride said, adding that the difference of a quarter of a percentage point in a $25,000 loan is $3 a month. . “Nobody will need to downsize from SUV to compact because of the higher prices,” he said.

Savings accounts, CDs, and more

Many people have stashed extra money in their bank accounts over the past two years, but whether the rate increase translates into a more attractive return depends on the type of account you have and the organization you’re with.

An increase in the Fed’s standard often means that banks will pay more interest on deposits — but not necessarily immediately. Banks tend to raise interest rates when they want to bring in more money, but the big banks actually have a lot of deposits. This gives them Little incentive to pay more depositors.

Small banks and online banks tend to Pay better rates Faster than large institutions, according to Ken Tomin, founder of DepositAccounts.com, part of LendingTree. He added that some of them, notably the savings arms of credit card banks, including Capital One and American Express, have already started increasing their rates a bit.

But overall, rates are still very low. The average online savings account was paying just 0.49 percent in March, according to DepositAccounts.com; The average was 0.48 a year ago. At traditional banks, the average savings account paid 0.12% in March, down slightly from 0.15 a year earlier.

Certificates of Deposit, which tend to track similarly dated Treasury bills, is starting to pick up a bit, particularly among online banks: The average one-year certificates of deposit in online banks is 0.67 percent in March, up from 0.51 percent in January. , while the average five-year certificate of deposit is 1.08%, up from 0.86% in January.