Key Takeaways
- Today’s highly anticipated jobs report showed resiliency in the April jobs market, with more jobs added than economists predicted.
- It’s welcome news, given the possibility that President Trump’s April tariff moves could have caused an employment slowdown, which in turn could have foreshadowed a recession.
- For now, the report reduces pressure on the Fed to cut interest rates soon, and it’s now expected that the central bank will remain neutral until July.
- That’s useful news for savers, as a continued rate pause from the Fed means the top savings, money market, and CD rates could also hold.
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How the Latest Jobs Numbers Could Impact Savings APYs
As with many metrics in U.S. financial markets, one factor impacts another, which in turn impacts another, and the domino effect continues. Today’s monthly jobs report is one of those data inputs that can have an outsized influence on many factors in our economy, many of which don’t seem related.
That may feel like the case when considering any links between the U.S. job market and what banks and credit unions are willing to pay for your cash deposits. While there isn’t a direct connection between the two, the monthly jobs report is one of the key factors considered by the Federal Reserve as it decides whether to raise, lower, or maintain the federal funds rate.
The fed funds rate, in turn, is important to savers because when it moves, so too do the rates that banks and credit unions pay on savings, money market, and certificate of deposit (CD) accounts. A rising Fed rate pushes bank APYs up, while cuts by the central bank will cause banks to lower their rates.
How Today’s Jobs Report Could Influence the Fed
The April jobs report released this morning delivered better-than-expected news. There was concern that the economic chaos surrounding President Trump’s tariff campaign last month could cause a jobs slowdown—and that would have increased the chances of a coming recession. In that situation, increasing pressure would have built for the Fed to cut its benchmark rate sooner rather than later.
But instead, the somewhat rosy jobs data means the labor market is showing resiliency and doesn’t need to be rescued by the Fed—at least not for now.
As a result, the financial markets are pricing in higher odds today than yesterday of when the Fed will make its first interest-rate cut of 2025, according to the CME Group’s FedWatch Tool. Previously, the probability had been about 2:1 in favor of the Fed announcing a rate reduction on June 18.
But today, that probability has dropped to about 35%, and interest rate traders are not pricing in a quarter-point rate cut until the July 29-30 meeting.
What This Means for Your Savings in the Bank
If those Fed rate forecasts come to fruition, the stellar rates you can enjoy right now on a high-yield savings account—up to 5.00% APY—could stick around for 2–3 months. The same could be expected for money market accounts, which currently pay as much as 4.40%.
The best nationwide CD rates could continue on their current path for some time. However, it’s important to note that when a Fed rate cut appears on the horizon, CD rates tend to fall sooner than savings account rates. That’s because CDs, by design, include a rate promise for months or years into the future. So, if at some point the writing is on the wall that the Fed will reduce its rate at its next meeting, banks and credit unions will begin lowering their CD rates ahead of the actual Fed announcement.
That means it’s still a smart time to lock in a CD. While you may have ample time to lock in one of today’s rates, there’s no guarantee, and a winning offer can disappear overnight. Also, since there is little chance of a rate increase in the coming months, the risk for future CD rates is almost all downside risk. So if you have a portion of savings you can commit for a few months, a year, or even longer, today’s rates—up to 4.50% right now—are smart to nail down.
Daily Rankings of the Best CDs and Savings Accounts
We update these rankings every business day to give you the best deposit rates available:
Important
Note that the “top rates” quoted here are the highest nationally available rates Investopedia has identified in its daily rate research on hundreds of banks and credit unions. This is much different than the national average, which includes all banks offering a CD with that term, including many large banks that pay a pittance in interest. Thus, the national averages are always quite low, while the top rates you can unearth by shopping around are often 5, 10, or even 15 times higher.
How We Find the Best Savings and CD Rates
Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. It also cannot specify a maximum deposit amount that’s below $5,000.
Banks must be available in at least 40 states to qualify as nationally available. And while some credit unions require you to donate to a specific charity or association to become a member if you don’t meet other eligibility criteria (e.g., you don’t live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.
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