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Lauren Williamson is the Financial and Home Services Editor for the Hearst E-Commerce team. She previously served as Senior Editor at Chicago magazine, where she led coverage of real estate and business, and before that reported on regulatory law and financial reform for a magazine geared toward in-house attorneys. You can reach her at lauren.williamson@hearst.com.Hearst Television participates in various affiliate marketing programs, which means we may get paid commissions on editorially chosen products purchased through our links to retailer sites. This may influence which products we write about and where those products appear on the site, but it does not affect our recommendations or advice, which are grounded in research. Mobile app users, click here for the best viewing experience.The Federal Reserve raised interest rates by a quarter point on March 22, following nearly two weeks of speculation amid turmoil in the banking industry. That brings the benchmark borrowing rate for federal funds to between 4.75% and 5%.The move signals that despite the collapse of Silicon Valley Bank and others over the past couple of weeks, the Fed believes it’s necessary to push on in its efforts to cool inflation. What’s more, the Federal Open Market Committee (FOMC) said in a statement announcing the rate hike that it anticipates “some additional policy firming” will be necessary to bring inflation down to an annual 2% target, though it stopped short of promising further rate hikes. “The U.S. banking system is sound and resilient,” the statement read. “Recent developments are likely to result in tighter credit conditions for households and businesses and to weigh on economic activity, hiring, and inflation. The extent of these effects is uncertain. The Committee remains highly attentive to inflation risks.”This is the ninth consecutive rate hike for the Fed over the course of the past year. The Fed raised interest rates by 0.25% at its February meeting as well, following a 0.5% hike in December. Those smaller increases suggested that the Fed believed inflation was starting to soften after it imposed a string of four 0.75% rate hikes during its previous meetings.That historic series of rate hikes has pushed interest rates on some savings accounts and certificates of deposit (CD) to their highest levels in 15 years. Interest rates on some high-yield savings accounts are topping 4%, while rates on the best 1-year CDs are just over 5%. Here’s what you need to know.PHNwYW4+PC9zcGFuPjxzY3JpcHQgYXN5bmM9InRydWUiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlLmpzIj48L3NjcmlwdD48ZGl2IGNsYXNzPSJteUZpbmFuY2Utd2lkZ2V0IiBkYXRhLWFkLWlkPSJjYjdiMTc1Yy03YjU2LTRmY2QtODVjZS1kYjcxNjJmZDhmM2UiIGRhdGEtY2FtcGFpZ249ImhlYXJzdHR2LXNhdmluZ3MtbXVsdGkiIGRhdGEtc3ViLWlkPeKAnGh0dHA6Ly93d3cua2NyYS5jb20vYXJ0aWNsZS9mZWQtcmF0ZS1oaWtlLW1lYW5zLWZvci1zYXZpbmdzLzQzMzk5NzcwIj48L2Rpdj4=How does the Federal Reserve affect savings account interest rates?The Federal Reserve doesn’t set interest rates on savings accounts or other consumer financial products, but its actions have an effect on them. At a high level, the federal funds rate is the interest rate banks charge to borrow from one another overnight. When the Fed raises that rate, the cost to banks goes up. One of the ways banks close the gap is to raise interest rates for consumers on deposits like savings accounts and certificates of deposit (CDs). The higher interest rates attract customers, which infuse the banks with funds that they can then use to fulfill their obligations.Interest on savings accounts has risen more slowly this past year than conventional wisdom would suggest. But it’s still more than tripled since the Fed started its push in March 2022. As of March 15, the national average interest rate for savings accounts is 0.23%, consistent with the previous week, according to �����԰�����ٱ�’s weekly survey.If you’re looking for the greatest return, online banks tend to offer much better interest rates than traditional banks, in some cases as much as 10 times higher. The best high-yield savings accounts these days are offering interest rates upwards of 4%. Yet most high-yield savings accounts offer the same flexibility as traditional savings accounts, such as the ability to easily transfer money to a checking account. CDs are also a good option for higher interest rates, especially if you plan to leave your money in place for a while. Short-term CDs — those that lock your money in place for a year or less — have the best returns right now, with some interest rates topping 5%.PHNwYW4+PC9zcGFuPjxzY3JpcHQgYXN5bmM9InRydWUiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlLmpzIj48L3NjcmlwdD48ZGl2IGNsYXNzPSJteUZpbmFuY2Utd2lkZ2V0IiBkYXRhLWFkLWlkPSIwN2ZiOTg4My0yNzgwLTQ3MjItYmIzZi1mMjBhZWEwYWM1ZWEiIGRhdGEtY2FtcGFpZ249ImhlYXJzdHR2LWNkLW11bHRpIiBkYXRhLXN1Yi1pZD0iaHR0cDovL3d3dy5rY3JhLmNvbS9hcnRpY2xlL2ZlZC1yYXRlLWhpa2UtbWVhbnMtZm9yLXNhdmluZ3MvNDMzOTk3NzAiPjwvZGl2Pg==Are more Fed rate hikes coming in 2023?In a press conference after the March 22 rate hike, Fed Chair Jerome Powell declined to say whether the FOMC would impose more rate hikes in 2023, in light of the recent economic turbulence. “It is too soon to determine the extent of these effects and therefore too soon to tell how monetary policy should respond,” he said. “As a result, we no longer state that we anticipate that ongoing rate increases will be appropriate to quell inflation; instead, we now anticipate that some additional policy firming may be appropriate.”Powell said that the FOMC “considered” holding off on an increase this month in response to the banking crisis. But ultimately they decided that another immediate rate hike was necessary to further curb inflation. “Inflation remains too high, and the labor market continues to be very tight,” he said. “Price stability is the responsibility of the Federal Reserve. Without price stability, the economy does not work for anyone.”Since the FOMC’s last meeting, inflation indicators haven’t provided a clear path forward for the Fed. Prices of goods and services rose 6% in February over the previous year, a small decline from the 6.4% increase in January, according to the Consumer Price Index report released March 14. Employment, meanwhile, remains strong, with 311,000 new jobs created in February, according to the jobs report released March 10. Unemployment, however, ticked up slightly to 3.6%, higher than the expected 3.4%, showing that the labor market might be starting to soften. That would tell the Fed that its fight against inflation is starting to work — but the picture is more complicated since job growth is still solid.Then there’s the instability thrust into the economy by the banking crisis. The Fed is also likely to begin facing greater pushback from Congress in the coming months. Senate Majority Leader Chuck Schumer said after the Fed’s March 22 announcement that he was “concerned about effect on the economy.” The upshot for consumers: In a tumultuous economy, it’s going to be hard to predict the Fed’s next move until the dust settles. In the meantime, it’s a good time for savers to control what they can and shop around for the best interest rates on savings accounts and CDs. PHNwYW4+PC9zcGFuPjxzY3JpcHQgYXN5bmM9InRydWUiIHNyYz0iaHR0cHM6Ly9zdGF0aWMubXlmaW5hbmNlLmNvbS93aWRnZXQvbXlGaW5hbmNlLmpzIj48L3NjcmlwdD48ZGl2IGNsYXNzPSJteUZpbmFuY2Utd2lkZ2V0IiBkYXRhLWFkLWlkPSJjYjdiMTc1Yy03YjU2LTRmY2QtODVjZS1kYjcxNjJmZDhmM2UiIGRhdGEtY2FtcGFpZ249ImhlYXJzdHR2LXNhdmluZ3MtbXVsdGkiIGRhdGEtc3ViLWlkPeKAnGh0dHA6Ly93d3cua2NyYS5jb20vYXJ0aWNsZS9mZWQtcmF0ZS1oaWtlLW1lYW5zLWZvci1zYXZpbmdzLzQzMzk5NzcwIj48L2Rpdj4=Editorial Disclosure: All articles are prepared by editorial staff and contributors. Opinions expressed therein are solely those of the editorial team and have not been reviewed or approved by any advertiser. The information, including rates and fees, presented in this article is accurate as of the date of the publish. Check the lender’s website for the most current information.This article was originally published on SFGate.com and reviewed by Jill Slattery, who serves as VP of Content for the Hearst E-Commerce team. Email her at jill.slattery@hearst.com.