The Federal Reserve which decides the direction of interest rates had a meeting this past week and they decided to keep interest rates where they are for now which will keep the highest savings account rates and CD rates low for 2012. Both savings rates and 1 year CD rates are at 0.75%.

This isn’t good news for those who rely on interest income from certificates of deposits and savings accounts. Deposit terms of 1 year will earn you a rate of around 1.00 percent. You can get CD rates and savings rates as high as 1.25 percent to 1.50 percent but for the most part rates are at 1.00 percent.

Since the economy is slowing down, first quarter GDP was only 1.8 percent which is the slowest rate in a year it looks like the Fed won’t raise rates any time soon.

The current Fed Funds Rate is in a targeted range of zero percent to 1/4 percent. The Fed Discount rate is also very low. Since both rates are going higher anytime soon bank CD rates and bank savings account rates won’t go higher either.