If you’re looking to boost your savings, a high-yield savings account could offer an attractive return and help your balance grow faster. However, not all banks offer high interest rates, so it’s important to shop around and find the cheapest savings rates available. Read on to learn more about where to find the best savings rates.
What are the best savings interest rates today?
Interest rates on savings accounts have increased over the past two years. However, interest rates vary widely, and interest rates on traditional savings accounts are still relatively low compared to other types of deposit accounts and market investments. According to the FDIC, the average interest rate on savings accounts is just 0.45%.
The good news is that many high-yield savings accounts offer interest rates of 5% per annum and more. The best rates are usually offered by online banks, although you may be able to find comparable savings rates at some credit unions and regional banks as well.
For example, the highest savings rate available is 5.50% per annum and is offered by Poppy Bank through the Premier Online Savings Account. This rate is guaranteed for three months and there is a minimum deposit of $1,000.
Betterment also offers a 5.50% APY account, but this is a cash management account offered through Betterment brokerage accounts, not a traditional savings account. There is no minimum deposit required.
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 savings accounts with high interest rates>>
Savings account interest rate forecasts for 2024
After several years of near-zero interest rates, the Federal Reserve began raising interest rates to combat rapidly rising inflation. As a result, savings rates also shot up, reaching a 15-year high.
However, the Fed has left its target interest rate unchanged for 2024, and savings account rates are beginning to stabilize. Additionally, as inflation eases, the Fed is expected to begin cutting rates later this year, most likely in September.
Although the federal funds rate does not directly affect deposit rates, there is a correlation between the two. That is, when the Fed cuts its interest rate, savings rates are expected to follow suit. How much interest rates will fall depends on how much the Fed cuts rates.
It’s difficult to predict exactly how and when interest rates will change in the future, but one thing is certain: the current high interest rates on savings accounts won’t last forever, so if you want to boost your savings and take advantage of the best rates on the market, now is the best time to do so.
How to open a savings account
The requirements for opening a savings account vary by financial institution, but if you’re ready to open an account, you can follow these general steps:
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Research savings account interest rates: Of course, the interest rate is one of the most important factors when choosing a savings account. Make sure you choose a savings account with a favorable interest rate to help your money grow.
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Find out what you absolutely need: Although interest rates on savings accounts should be top of mind, it’s not the only factor to consider. You should also think about what else you want from your account, whether it’s no minimum balance requirement, low fees, or other perks. The key is to find a savings account with a solid interest rate that will also help you reach your goals.
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Prepare documentation: To open a bank account, you will need to provide some important personal information and documents. Before submitting your application, make sure you have your social security number, driver’s license or passport number, and proof of address.
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Fill out the application: In many cases, you can apply for a savings account online. However, some financial institutions may require you to come to the branch in person to apply. In any case, applying for a new savings account should only take a few minutes. In many cases, you will receive your approval decision immediately.
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Deposit money into your account: Once your savings account application is approved, you’ll need to deposit money into the account. Find out the minimum deposit requirements and funding schedule.
Read more: Step-by-step guide to opening a high-interest savings account
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