America, get ready for another Fed interest rate hike

Get ready for another rate hike, America.

The Federal Reserve is expected to raise its key interest rate on Wednesday. It would be the second rate hike since December and a sign that the central bank plans to raise rates faster this year.

One rate hike won’t change the world but higher rates affect millions of Americans. If you have a credit card or savings account, want to buy a home or a car, and invest in stocks or bonds, pay attention.

The Fed put rates at zero in December 2008 to resuscitate the collapsed housing market during the Great Recession. America is no longer in crisis mode today, and the economy can bear to pay higher rates for financing. A rate hike is a sign that the U.S. economy is improving.

Here’s how the Fed’s rate hikes could affect you.

1. Savings accounts will pay more

American savers have struggled for years, earning next to nothing at the bank. Now they could be a step closer to light at the end of that tunnel and earn a little more interest on savings account deposits.

When the Fed raises short-term rates, banks pay customers higher interest on their deposits. But how much higher and how fast they will go up will depend on whether the Fed will keep raising rates.

To start seeing a real difference, it could take one to two years at least, experts say. After all, the Fed is expected to raise by just 0.25% on Wednesday. Most Fed leaders plan to raise rates three times this year, but that could change very quickly depending on the economy’s performance.

In December 2015, the Fed said it would raise rates four times in 2016. But that didn’t happen: It only raised rates once.

Bottom line: if rates go up Wednesday, it’s good news for savers but you still need to be patient.