What a Federal Reserve rate hike means for you

“Car loan rates will go up if the Fed hikes rates, but it won’t be a problem for car buyers because it has such a limited impact on monthly payments,” Mr McBride said, adding that the difference is a quarter of a point A $25,000 loan costs $3 a month. “Nobody is going to have to downsize from SUVs to compacts because of rising prices,” he said.

Many people have added extra money to their bank accounts in recent years, but whether interest rate increases result in a more attractive return depends on the type of account you have and the institution you’re doing business with.

A hike in the Fed benchmark often means banks pay more interest on deposits — but not necessarily immediately. Banks tend to raise interest rates when they want to raise more money, but the largest banks already have a lot of deposits. That gives them little incentive to pay depositors more.

According to Ken Tumin, founder of DepositAccounts.com, part of LendingTree, smaller banks and online banks tend to pay better interest rates faster than larger institutions. And some of them, notably credit card bank thrifts like Capital One and American Express, have already started raising their rates a bit, he added.

But overall rates remain fairly low. According to DepositAccounts.com, the average online savings account paid just 0.49 percent in March; the average a year ago was 0.48. At stationary banks, the average savings account paid 0.12 percent in March, slightly less than 0.15 in the previous year.

Certificates of deposit, which typically track similarly dated government bonds, have already started moving slightly higher, particularly at online banks: the average one-year CD at online banks is 0.67 percent in March, up from 0.51 percent in January the average five-year CD is 1.08 percent, up from 0.86 percent in January.

Most money market mutual funds, which tend to hold lower-risk assets like short-dated government bonds, are also likely to rise, albeit from a low. Most money market funds yield less than 0.02 percent. “They’re usually quite responsive to changes in the federal funds rate,” Mr. Tumin said.

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