Why interest rates are rising on your loans, but not for your savings account. : The Indicator from Planet Money When the Fed hikes interest rates, the interest rate on your savings account usually follows in step. But recently, that logic hasn't held up. We ask an economist and a community banker why.

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Interest rates up, but not on your savings account

Interest rates up, but not on your savings account

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Carl de Souza/AFP via Getty Images
An interactive feature, designed for educational purposes, which challenges the user to control inflation by lowering or raising a lever, is pictured at the Bank of England Museum, in London, on October 7, 2008.
Carl de Souza/AFP via Getty Images

When the Fed hikes interest rates, as it's been doing to bring down inflation, borrowing—like mortgages and loans—gets more expensive˛ And higher rates should mean savers are earning more interest on their bank accounts.

But lately, consumers are getting left in the dust. As the Fed pushes interest rates higher, savings deposit rates are hovering effectively near zero. Today, we talk with an economist and the CEO of a community bank about why that's the case, and what it would take for that to change.

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