Although the Federal Reserve increased rates last year, 2019 appears to be a waiting game because the economy is healthy and there is less concern over inflation.
As a consumer, you may wonder how a rising federal funds rate affects your finances and what moves you can make to improve your circumstances. Here are some tips to help you make the most of your money.
Loan or Credit Card Debt
If the federal funds rate is increased, the interest rate on variable rate loans and credit cards will also increase. This makes borrowing money more expensive. It has been predicted that interest rates will hold steady in 2019, making it a good time to attack your debt and pay off as much as you can. SchoolsFirst FCU may be able to help you save money on existing loans or credit cards, or help you consolidate debt. Call us or visit a branch near you so we can review your situation.
Many people want to buy a home, but worry about rising rates and if they can still get a competitive mortgage loan. The truth is, rates are moving so gradually that it’s a good time to buy. If you’re a homeowner with an adjustable rate mortgage, or ARM, you may want to refinance and get a fixed-rate loan, so you can budget for a steady payment. SchoolsFirst FCU offers ARM products with a starting interest rate that is set for five or seven years and adjusts up or down once every year or five years depending on the loan program. SchoolsFirst FCU also offers fixed rate mortgages. Talk to one of our loan consultants to find the right solution for you.
Interest rates on traditional savings accounts have been low for a while now. And even with a rake hike, you may not see much of an increase in what you can earn on your money. That’s because there is no direct relationship between the interest rates on savings accounts and the federal funds rate. Still, it pays to shop around; some online banks offer higher interest rates. If you’re looking for a way to maximize your savings, a SchoolsFirst Share Certificate may be right for you because Share Certificates offer higher dividend rates than regular savings accounts. Learn more.
For more information about the Federal Funds rate increase, please see frequently asked questions.
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Extra Credit provides general information to help improve our Member’s financial lives. Every situation is different, so please contact us for guidance on your specific needs. The advice provided in Extra Credit is not intended to serve as a substitute for speaking to a loan representative, financial advisor, or GreenPath Financial Wellness counselor who can help tailor a solution for you.
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