The Fed: Interest-rate-hike scoreboard: Fed 8, U.S. savers 1

The Fed: Interest-rate-hike scoreboard: Fed 8, U.S. savers 1

Federal Reserve Chairman Jerome Powell

When the Federal Reserve had interest rates near zero, critics in Congress and on Wall Street would argue that the central bank was waging a “war on savers.”

Few are making that argument now that the Fed on Wednesday increased interest rates for an eighth time. Yet savers effectively have seen just one rate increase.

According to RateWatch, the average rate that savers get on a benchmark $10,000 minimum, 12-month certificate of deposit was just 0.43% in August. Meanwhile, the federal funds rate was 1.91% before Wednesday’s hike. Fed hikes interest rates

Federal Reserve Chairman Jerome Powell back in February acknowledged that retail deposit rates were “sticky” on the way up. “They generally come up with a lag,” he told the House Financial Services Committee.

Banks have profited. Net interest income in the second quarter rose 9% to $134.1 billion, with 85% of banks reporting year-over-year increases, the Federal Deposit Insurance Corp. reported. Net interest margins rose to 3.38%, a six-year high.

It’s not always the case that depositors fare worse. Particularly during the recession, banks kept savings rates high since funding was scarce.

Shopping online can net savers far better rates than average. Banks including Goldman Sachs’s GS, -1.56%  Marcus and Capital One 360 COF, -1.31%   offer CDs yielding around 2.5%.

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