April Fed Funds “Effective Rate” Is Lowest In History

The Federal Reserve announced monthly data for April this afternoon. The Fed Funds “Effective Rate” for April 2020 was 0.05%, the lowest reported monthly rate in history dating back to July 1954. The Effective Federal Funds Rate is the real interest rate at which depository institutions actually lend balances at the Federal Reserve to other depository institutions overnight.  This Actual Rate changes daily but is usually close to the Fed Funds Target Rate or within the range desired by the Federal Reserve. The previous historic low for the effective rate was 0.07% for a few months in 2011 and 2014.

The Fed Funds “Target Rate” remains in a range from 0.00% to 0.25% since March 16, 2020. This is what is commonly known and reported as the Fed Funds Rate which is the short-term rate objective or target of the Federal Reserve Board. Also known as the Intended Federal Funds Rate, it can be expressed as a specific rate or as a range of rates.

 

Mortgage Rates Hit Record Lows

Mortgage rates are now at historic lows with 30 Year Fixed Rate Mortgages below previous historic lows in 2012. There continues to be a lack of supply in jumbo mortgages with many lenders deciding to stop lending on larger mortgage loans, as well as tightening of lending standards.

Freddie Mac’s Weekly Survey was released this morning with its most recent assessment of the mortgage rate landscape. See the details of their survey below.

(dynamic chart with current info)

Today’s Mortgage Rates & Lenders Today’s Bond Rates

Changes to Savings Account Withdrawal Limits and Fees

A new rule permits banks to allow customers more than six withdrawals per month from savings accounts and waive excessive transaction fees. Previously, one of the main distinctions between checking and savings accounts was the inability to withdraw from a saving account more than six times per month without excessive transaction fees. This only relates to taking money out of a savings account, not putting money in savings accounts.

The key to understanding the new rule is that banks now have the choice whether to limit transfers from savings accounts. They were previously mandated to limit transfers. So each bank can now come up with its own rules for savings account transfers. For instance, Ally Bank is allowing unlimited transfers from savings accounts without charging excess transaction fees until July 18, 2020. Each bank may be different so you will need to check with your bank for its new rules.

 


Press Release
April 24, 2020

Federal Reserve Board announces interim final rule to delete the six-per-month limit on convenient transfers from the “savings deposit” definition in Regulation D

The Federal Reserve Board on Friday announced an interim final rule to amend Regulation D (Reserve Requirements of Depository Institutions) to delete the six-per-month limit on convenient transfers from the “savings deposit” definition. The interim final rule allows depository institutions immediately to suspend enforcement of the six transfer limit and to allow their customers to make an unlimited number of convenient transfers and withdrawals from their savings deposits at a time when financial events associated with the coronavirus pandemic have made such access more urgent.

The regulatory limit in Regulation D was the basis for distinguishing between reservable “transaction accounts” and non-reservable “savings deposits.” The Board’s recent action reducing all reserve requirement […]

Mortgage Rates Tick Up

Mortgage rates ticked up a little this week, but remain near historic lows. There continues to be a lack of supply in jumbo mortgages with many lenders deciding to stop lending on larger mortgage loans, as well as continued tightening of lending standards.

Freddie Mac’s Weekly Survey was released this morning with its most recent assessment of the mortgage rate landscape. See the details of their survey below.

(dynamic chart with current info)

Today’s Mortgage Rates & Lenders Today’s Bond Rates

Check On Status Of Economic Impact Payments

The IRS started to distribute stimulus payments this week via direct deposit. If you haven’t received yours and are looking for your Economic Impact Payment, check the “Get My Payment” page at the IRS website.

Get My Payment Website from IRS

 

 

At this website you can find:

  • Your payment status
  • Your payment type
  • Whether they need more information from you, including your current  bank account information

 

If you want to find out how much you should expect to receive, there is a payment calculator available online. See our previous article (click here).