How does the federal funds rate affect the APY my bank offers for its savings accounts?
In: Economics
The funds rate generally affects the rate at which everyone can borrow. The lower the fed funds rate, the lower broader interest rates usually tend to be (under normal circumstances anyways).
Think about your APY as what the bank is offering you to borrow from you. The fed funds rate goes down, so they can borrow at less, so they offer you a lower APY
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