H.15 Selected Interest Rates | Title | FRASER (2024)

FAQs

What does H 15 on selected interest rates mean? ›

The United States Federal Reserve Statistical Release H. 15 is a weekly publication (with daily updates) of the Federal Reserve System of selected market interest rates. Many residential mortgage loans are indexed to the one-year treasury rate published in the H. 15 release.

Remember, while higher rates are good for deposit and savings accounts, they're not good for certain types of debt like credit card debt. When rates are high, it's good to pay off or considerably lower any balance due.

A 15% APR is good for credit cards and personal loans, as it's cheaper than average. On the other hand, a 15% APR is not good for mortgages, student loans, or auto loans, as it's far higher than what most borrowers should expect to pay. A 15% APR is good for a credit card. The average APR on a credit card is 22.89%.

Here is an example: $15 is 15% of the $100 borrowed. The APR is the annual percentage rate, so 15% must be multiplied by the number of days in a year: .15(365) = 54.75.

Higher interest rates tend to negatively affect earnings and stock prices (often with the exception of the financial sector). Changes in the interest rate tend to impact the stock market quickly but often have a lagged effect on other key economic sectors such as mortgages and auto loans.

You can capitalize on higher rates by purchasing real estate and selling off unneeded assets. Short-term and floating-rate bonds are also suitable investments during rising rates as they reduce portfolio volatility. Hedge your bets by investing in inflation-proof investments and instruments with credit-based yields.

When interest rates are high, it's more expensive to borrow money; when interest rates are low, it's less expensive to borrow money. Before you agree to a loan or sign up for a new credit card, it's important to make sure you completely understand how the interest rate will affect the total amount you owe.

How high is too high for interest rates? ›

A high-interest loan is one with an annual percentage rate above 36% that can be tough to repay.

The Pros of Rising Interest Rates

There are some upsides to rising rates: More interest for savers. Banks typically increase the amount of interest they pay on deposits over time when the Federal Reserve raises interest rates. Fixed income securities tend to offer higher rates of interest as well.

The good news: With the U.S. Federal Reserve widely expected to begin cutting its benchmark interest rate in 2024, mortgage rates could drop as well—at least slightly. But that doesn't necessarily mean a return to the pre-pandemic era of more affordable mortgages and home prices.

What Is the Current Prime Rate? As of May 20, 2024, the current prime rate is 8.50%, according to The Wall Street Journal's Money Rates table.

The current Fed rate is 5.25% to 5.50%. That's according to the Federal Open Market Committee (FOMC), the monetary policymaking part of the Federal Reserve that holds eight scheduled meetings a year to set the federal funds rate.

At the end of each day, the credit card company multiplies the current balance on your account by the daily rate. That daily interest charge is added to your balance the next day. For example, let's say you have a credit card with an APR of 15%. Your daily rate would be 0.041% (15% divided by 365).

A 15-year fixed mortgage is a home loan with a fixed interest rate for the life of the loan. As a result, homeowners pay the same principal and interest payment amount each month, unlike an adjustable-rate mortgage whose interest rate could change annually, drastically changing a borrower's monthly payment.

Lenders charge a lower interest rate for 15-year loans because it's easier to make predictions about repayment over a 15-year horizon than it is over a 30-year horizon. Another reason for the savings? Home buyers are borrowing the money for half the time, which dramatically reduces the cost of borrowing.

Higher interest rates can make borrowing money more expensive for consumers and businesses, while also potentially making it harder to get approved for loans. On the positive side, higher interest rates can benefit savers as banks increase yields to attract more deposits.