What Is the Federal Funds Rate?
The Federal Funds Rate is the interest rate that banks charge each other for overnight loans. While consumers don’t borrow at this rate directly, it influences many of the interest rates people see every day.
Current Federal Funds Rate
3.64%
Why this rate matters
Changes to the Federal Funds Rate tend to affect:
- Savings account interest rates
- Credit card APRs
- Auto loan and personal loan rates
- Mortgage rates (indirectly)
How it affects savings
When the Federal Funds Rate rises, banks often increase the interest they pay on savings accounts — especially high-yield savings accounts. When it falls, savings rates may decline over time.
How it affects borrowing
Higher Fed rates usually mean higher interest costs on variable-rate debt, such as credit cards. Lower rates can reduce borrowing costs, though changes may take time to reach consumers.
This page is for educational purposes only and does not predict future rate changes or offer financial advice.