Due to several interest rate hikes by the Federal Reserve, today’s savings account interest rates are among the highest in over a decade. However, savings account interest rates vary widely from bank to bank, so it’s important that you make sure you get the best possible rate when purchasing a savings account. Below is an overview of current savings account interest rates and where to find the best deals.
Overview of savings interest rates today
The national average interest rate on savings accounts is 0.45%, according to the FDIC. That may not seem like much, but consider that just two years ago it was only 0.07%, which is a sharp increase in a short period of time.
This is largely due to monetary policy decisions by the Fed, which began raising its benchmark interest rate in March 2022 to combat soaring inflation. Since then, the Fed has raised rates 11 times, but has paused further rate hikes in 2024. Experts believe the Fed will eventually begin cutting its benchmark interest rate later this year, meaning interest rates on deposit accounts, including savings rates, will likely begin to decline.
Although the national average savings rate is relatively 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 an APR of over 5%. Since these rates may not be available for much longer, consider opening a high-yield savings account now to take advantage of today’s high interest rates.
Here’s a look at some of the best savings rates currently offered by our verified partners:
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Related: The 10 best high-yield savings accounts today>>
How much interest can I earn on a savings account?
The amount of interest you can earn on a savings account depends on the annual percentage rate (APY), which is a measure of your total earnings after one year when the base rate and the frequency of interest rate increases are taken into account (interest on savings accounts usually increases daily).
For example, suppose you put $1,000 into a savings account with an average interest rate of 0.45% and daily compounding. At the end of a year, your balance would have grown to $1,004.52—your original $1,000 deposit plus just $4.52 in interest.
Now let’s say you choose a high-yield savings account with 5% APR instead. In this case, your balance would grow to $1,051.27 over the same period, including $51.27 in interest.
The more you put into a savings account, the more you can earn. If we take the same example of a high-yield savings account with 5% APR but deposit $10,000, your total balance after one year would be $10,512.67, meaning you would earn $512.67 in interest.
Read more: What is a good savings interest rate?
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