I’m new to savings accounts and money – (I just got my masters degree and got my first real job about 2 months ago) so please forgive me if I sound ignorant. I’m just trying to figure things out.
I’m trying to save to buy a house. I plan to put 1400 a month into a savings account with an initial 2800 dollar deposit. I don’t want a CD because I want to have access to the money in case i need it (I do realize on transactions from a savings you’re limited on withdrawals per month). So far, the best rates I can find are 1.3% online (no monthly fee or minimum balance, and no minimum initial deposit).
I remember a few years ago savings accounts had interest rates of over 3%. I know that a big part of the reason they’re not so high is that the government lending rate has gone down. But, will the rates ever increase again to the old levels? Is there something I should be doing that would be more beneficial with my money? Are there any other reasons the rates are so low now? I’m planning on saving my money for 2 years to have a little bit shy of 40,000 dollars to put towards a down payment on a house.