Can you hear it? The death sentence for 4% and 5% interest rates on savings accounts, money market accounts and CDs? It’s fast approaching. These rates were only possible thanks to a higher federal funds rate than we’ve seen in years.
But at its September meeting, the Federal Reserve is expected to begin cutting that rate now that inflation has finally subsided. Once that happens, you can expect interest rates on bank accounts to drop — as will interest rates on credit cards and loans, which will greatly benefit Americans who are in debt or looking to borrow money.
My high-yield savings account (HYSA) currently pays more than 4% annual interest – but that rate will probably drop soon, too. For this reason, I will keep the account even if it no longer pays such a good interest rate on the money I save.
1. I love the other features of my bank
OK, I count the APY of this bank account as one of my favorite features—who wouldn’t want to earn free money just for funding their account? But that’s not the only reason I love the account.
Our pick of the best high-yield savings accounts of 2024
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Capital One 360 Performance Savings 
APY 4.25%
Price info
For the most current rates, visit Capital One’s website. The advertised annual percentage rate (APY) is variable and is effective April 11, 2024. Rates are subject to change at any time before or after account opening.
Member of the FDIC. |
APY 4.25%
Price info
For the most current rates, visit Capital One’s website. The advertised annual percentage rate (APY) is variable and is effective April 11, 2024. Rates are subject to change at any time before or after account opening. |
Min. to earn $0 |
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UFB Portfolio Savings Account 
APY 5.15%
Price info
To ensure you continue to receive the highest interest rate with UFB, you need to keep an eye on their interest rates. Occasionally, the bank opens new accounts with higher interest rates. Existing accounts will need to contact the bank to request to be transferred to one of these new accounts.
Member of the FDIC. |
APY 5.15%
Price info
To ensure you continue to receive the highest interest rate with UFB, you need to keep an eye on their interest rates. Occasionally, the bank opens new accounts with higher interest rates. Existing accounts will need to contact the bank to request to be transferred to one of these new accounts. |
Min. to earn $0 |
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American Express® High-Interest Savings 
APY 4.25%
Price info
4.25% annual percentage rate from August 27, 2024
Member of the FDIC. |
APY 4.25%
Price info
4.25% annual percentage rate from August 27, 2024 |
Min. to earn 1 dollar |
The online bank where the account is held has a fantastic mobile app – not only can I check my balance from anywhere, but I can also use Zelle to transfer money within the bank and to others at will. My bank has a network of more than 40,000 free ATMs that I can use, including one right in my neighborhood. If I ever need to withdraw cash elsewhere, I’ll be reimbursed up to $10 per month in ATM fees.
And my HYSA has my favorite feature in online banking: savings pots! This allows me to save for different goals in the same account without all the money getting mixed up. This is super convenient since I keep my quarterly tax payments, vacation savings, emergency funds, and several other pots of money all in the same account.
2. I have several accounts at the same bank
Another reason I’ll hold onto my HYSA even if the interest rate drops is because I’m locked into that bank’s ecosystem. Shortly after opening the HYSA, I opened a checking account so I can easily withdraw cash and also make purchases using a debit card. And I just opened an Individual Retirement Account (IRA) at the same bank so I can finally start investing for retirement.
3. The APY will still be better than my savings account at a major bank
And even if the Federal Reserve cuts the prime rate, the factors that allow me to pay higher interest at my HYSA than at a major bank will remain in place even after the Federal Reserve cuts the prime rate. My HYSA is with an online bank, which means I don’t get charged account maintenance fees, nor do I get a lower annual percentage rate at branch banks.
Also, because of their existence on the Internet, online banks offer fewer services than traditional banks – you can’t open a safe deposit box there, for example. For this reason, I expect my HYSA to continue to be better than my savings account at a major bank (which only yields 0.01%) and also better than the national savings account average, whatever it drops to after the rate cut (at the time of writing, it is 0.46%).
Ultimately, my high-yield savings account has been a fantastic addition to my personal finances. Even if the account doesn’t earn more than 4% annual interest, all of these benefits make it worth keeping.
