In recent times, we’ve seen savings account interest rates climb to levels not experienced in over a decade, thanks to numerous rate hikes by the Federal Reserve. However, with the Fed reducing its target rate three times as of late 2024, we’re now witnessing a decline in those enticing interest rates. If you’re on the hunt for a savings account, now’s the time to ensure you’re snagging the most competitive rate available. Here, we’ll give you a detailed look at today’s savings interest rates and highlight where to find the best deals.
The national average savings account rate currently sits at 0.42%, according to FDIC data. While this might appear modest, it’s a significant jump from three years ago when it was merely 0.06%. This increase marks a notable shift in a short span of time.
Presently, the top savings account rate offered by our partners stands at an attractive 4.75% APY. You can secure this rate with Openbank, requiring a $500 minimum deposit, or Poppy Bank, which asks for a $1,000 minimum. Since these appealing rates might not last forever, it could be wise to act quickly and open a high-yield savings account to benefit from these elevated rates.
Here’s a roundup of some of the standout savings rates available today from our vetted partners:
(For additional reading: 10 top high-yield savings accounts today »)
Your earnings from a savings account hinge primarily on the annual percentage yield (APY). This figure reflects your total potential earnings over the course of a year, factoring in both the base interest rate and the frequency of interest compounding, which typically occurs daily in savings accounts.
Imagine you deposit $1,000 in an account with the average interest rate of 0.42% and daily compounding. After one year, your balance would grow slightly to $1,004.21, a mix of your initial $1,000 and a modest $4.21 in interest.
Now, compare that to opting for a high-yield savings account with a 4% APY. In this scenario, your same deposit would increase to $1,040.81 over the year, yielding a more substantial $40.81 in interest.
Naturally, the more you invest in a savings account, the greater your potential earnings. Using the 4% APY high-yield example again but with an initial deposit of $10,000, your balance would reach $10,408.08 after a year, allowing you to earn $408.08 in interest.
For further insights, check out our detailed guide on what constitutes a good savings account rate.
