How low can interest rates go? The Fed's announcement spells more bad news for savers -- but good news for homebuyers. By MSN Money partner on Thu, Jan 26, 2012 11:13 AM 2You recommend this0%You don't recommend this100%Shared 27 timesThis post comes from AnnaMaria Andriotis at partner site SmartMoney. Saving money may soon get even less rewarding. The Federal Reserve's announcement Wednesday to keep short-term interest rates near zero through 2014 may result in still lower interest rates on bank accounts, analysts say. How low? Rates on savings accounts may drop closer to 0% over the next 12 to 18 months, says Dan Geller, executive vice president at Market Rates Insight. Even though the federal funds rate has been stuck at 0% to 0.25% since late 2008, banks continue to lower interest rates on their accounts. The average rate on savings accounts is 0.36%, down from 0.4% in November, according to MRI. One-year and five-year certificates of deposit have an average yield of 0.33% and 1.57%, respectively. Even worse, savers will have to put up with nearly nonexistent returns for at least another three years before they can see any meaningful improvement, says Greg McBride, senior financial analyst at Bankrate.com. Post continues below.