The Federal Reserve lowered its target interest rate in September. That means interest rates on high-yield savings accounts, which have recently been above 5% APY, are also starting to decline.
To get the highest possible interest on your savings, it’s important that you do your research and find competitive offers. Not sure where to start? Here’s a closer look at today’s savings interest rates and where to find the best ones.
According to the FDIC, the average interest rate on a traditional savings account is just 0.43%. However, the best savings rates are found on high-yield accounts, which often pay around 4.5% to 5% APY or even more.
These top rates are generally offered by online banks, but you can also find competitive rates at some credit unions and community banks.
For example, the highest interest rate on savings accounts currently available is 4.75% APY. This rate is offered by Everbank and no minimum opening deposit is required.
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 Available Today>>
Interest rates on savings accounts have fluctuated quite a bit over the past decade. From 2010 to about 2015, interest rates were at rock bottom, hovering around 0.06% to 0.10%. This was largely due to the 2008 financial crisis and the Federal Reserve’s decision to cut interest rates to near zero to stimulate economic growth.
From 2015 to 2018, interest rates began to gradually rise. However, by historical standards they remained low. Then, the outbreak of the COVID-19 pandemic in 2020 led to another sharp drop in interest rates, as the Fed cut rates again to stimulate the economy. This brought the average savings interest rate to a new low, around 0.05% to 0.06% in mid-2021.
Since then, interest rates on savings accounts have recovered significantly, thanks in large part to Fed rate hikes in response to skyrocketing inflation. However, the Fed eventually cut the federal funds rate in September and November 2024, and as a result, deposit rates also begin to decline.
Below you can see how savings interest rates have changed over the past ten years:
Even though interest rates have risen considerably since 2021, the average interest on savings accounts is still quite low, especially compared to market investments. If you’re saving for a long-term goal, such as a child’s college education or retirement, a savings account likely won’t provide the return needed to reach your goal.
On the other hand, if you’re saving for an emergency fund, a down payment on your home, a vacation, or another short-term goal, a high-yield savings account is ideal, especially if you want to have the money available when needed. Other types of deposit accounts, including money markets and CDs, may offer similar or even better rates but limit how often you can withdraw money. The key is to shop around and find an account that offers a competitive rate with low or no fees.
