The last few years have been strange for banks. Rising interest rates have pushed savings account rates to extremely high levels, and borrowing money has become so expensive that some people have had to rethink their home buying plans and other decisions important.

But little by little, the tide begins to turn. While we can’t predict exactly where bank interest rates will move next year, we can be fairly certain that the following two changes will occur.

1. Bank accounts will earn less interest

Interest rates on savings accounts and certificates of deposit (CDs) have already fallen from their peak of 5.00% APY, and they are expected to fall even further. Experts predict two more rate cuts from the Federal Reserve before the end of the year, followed by four more cuts in 2025.

Fed rate cuts don’t directly affect bank account interest rates, but banks generally follow what the Fed does. Banks are almost certain to drop rates quickly following future rate cuts, although your bank may not cut rates by the same amount.

Our picks for the best high-yield savings accounts of 2024

American Express® High Yield Savings APY 4.00% Pricing information Annual percentage yield of 4.00% as of November 3, 2024 Member of the FDIC.	APY 4.00% Pricing information Annual percentage yield of 4.00% as of November 3, 2024	Min. earn $0
Capital One 360 ​​Performance Savings APY 4.00% Pricing information Check the Capital One website for the most up-to-date pricing. The Advertised Annual Percentage Yield (APY) is variable and accurate as of October 23, 2024. Rates are subject to change at any time before or after account opening. Member of the FDIC.	APY 4.00% Pricing information Check the Capital One website for the most up-to-date pricing. The Advertised Annual Percentage Yield (APY) is variable and accurate as of October 23, 2024. Rates are subject to change at any time before or after account opening.	Min. earn $0
CIT Platinum Savings APY 4.70% APY on balances of $5,000 or more Pricing information 4.70% APY on balances of $5,000 or more; otherwise, 0.25% APY Min. earn $100 to open an account, $5,000 for maximum APY Member of the FDIC.	APY 4.70% APY on balances of $5,000 or more Pricing information 4.70% APY on balances of $5,000 or more; otherwise, 0.25% APY	Min. earn $100 to open an account, $5,000 for maximum APY

Savings accounts will be the most affected because their interest rates are variable. However, if you open a Discover® online savings accountyou can rest assured that even if rates drop, you’ll continue to receive a rate well above the national average, no matter what. This is true for all high-yield savings account rates.

CD owners won’t notice the changes immediately because CD prices are typically locked in for the entire life of the CD. However, those hoping to open new CDs would do well to act quickly before the next rate cut, scheduled for November 7. If you wait longer, you’ll likely have to settle for a lower rate than what’s available today.

2. Borrowing money will become more affordable

While the loss of interest on bank accounts is disappointing, it could be largely or entirely offset by a lower cost of borrowing for those who currently have or are considering taking out a loan in the near future. Expect to see mortgage rates, personal loans and other types of loans become more affordable throughout 2025.

If you’re hoping to refinance your existing mortgage, consider waiting until at least midway through 2025. Refinancing comes with closing costs, so you only want to do it once during this cycle. reduction of rates. By waiting for a few more rate cuts, you may be able to get a lower rate.

If you’re considering purchasing a new home, consider waiting until 2025 if you can. Otherwise, you may also want to consider refinancing later.

Just because it’s not time to make your move yet doesn’t mean you can’t compare some of the best refinancing lenders. Many allow you to get prequalified online without hurting your credit score, so you can get an idea of ​​which one offers you the best rates. Then check back regularly every month or two to see where the rates are. When they reach a level you are comfortable with, don’t hesitate to apply.

Just keep in mind that when rates drop, many people try to refinance, which can cause a delay in home appraisals. Completing this process may take a little longer than expected. If you have questions about what you should do, contact your bank or a refinancing lender you’re considering to discuss your options.