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The Federal Reserve cut its target rate three times by the end of 2024, which means savings interest rates are falling. So it’s important to make sure you’re getting the best possible rate when you shop for a savings account. Below is a breakdown of current savings interest rates and where to find the best deals.
The average national savings account rate it stands at 0.42%, according to the FDIC. That may not seem like much, but keep in mind that three years ago, it was just 0.06%.
While the national average savings interest rate is quite low compared to other types of accounts (like CDs) and investments, the best savings rates on the market today are much higher. In fact, some of the top accounts currently offer 4% APY and more.
Today, the highest savings rate available to our members is 4.75% APY. This fee is offered by Openbank and requires a minimum opening deposit of $500.
Here’s a look at some of the best savings rates available today from our verified partners:
Related: The 10 Best High Yield Savings Accounts Today >>
The amount of interest you can earn from a savings account depends on annual percentage rate (APY). This is a measure of your total earnings after one year if you take into account the base interest rate and how often the interest is compounded (savings account interest is usually compounded daily).
Let’s say you put $1,000 into a savings account at an average interest rate of 0.42% with daily compounding. At the end of one year, your balance would increase to $1,004.21: your initial deposit of $1,000, plus just $4.21 in interest.
Now let’s say you choose a high-yield savings account that offers 4% APY. In this case, your balance would increase to $1,040.81 over the same period, which includes $40.81 in interest.
The more you deposit in a savings account, the more you earn. If we took our same example of a high-yield savings account at 4% APY, but deposited $10,000, the total balance after one year would be $10,408.08, meaning you would earn 408, 08 dollars in interest.
Read more: What is a good savings account rate?
