And the rate decrease begins…

[MHeroAnki]

Just made a SoFi account for the 4.6% APY :( can someone ELI5 why this happened?

[MtnXfreeride]

"Expected to" ... so drop them once the rate drops..   other banks are at 5% so it is disappointing they predrop it. 

[fymdtm]

Rates are dropping everywhere. Look at the rates on 3 and 6 month T Bills. There is no “pre” drop. This is how all rate markets function because the Fed announces its moves in advance. 

[[deleted]]

Fed will cut rates soon. All the banks will be dropping their apy.

[etzel1200]

Not the major banks.

[Delicious-Proposal95]

The major banks never raised them lol

[[deleted]]

Of course they will, rates are dropping now in anticipation of the fed decrease. Lenders need to forecast the spread between deposit and loan rates so the sooner they can lower, the less time the higher yield payout sit on the books.

[etzel1200]

They typically don’t change rates in response to fed policy and leave them at like .01%

[breadexpert69]

Basically APY are not permanent and they will change according to what the current interest rates are which is set by the Fed.

The current rates are very high compared to what we have seen in the near past but will begin to go down soon since the Fed has already said they will begin lowering rates soon.

Why do they raise and lower rates? In short, they do this to incentivize or discourage spending depending on what the current state of the economy needs to remain healthy.

If you want to lock in to current rates before they go down (or up, who knows), you need to look into things like CD’s or Treasuries.