The Fed cut its interest rate target three times in late 2024, meaning savings rates will fall from historic highs. It’s important to make sure you get the best possible rate when shopping for a savings account. Here’s a breakdown of today’s savings interest rates and where to find the best offers.
The national average savings account rate is 0.42%, according to the Federal Deposit Insurance Corporation. This may not seem like a lot, but keep in mind that three years ago, it was just 0.06%, reflecting a sharp rise in a short period of time.
Today, the highest savings account rate available from our partners is 4.35% APY. This rate is offered by CIT Bank and there is a minimum opening deposit of $5,000.
Since these rates may not be around for much longer, consider opening a high-yield savings account now to take advantage of today’s higher rates.
Here’s a look at some of the best savings rates available today from our approved partners:
Related to: Today’s Top 10 High Yield Savings Accounts >>
The amount of interest you can earn from a savings account depends on the annual percentage rate (APY). This is a measure of your total earnings after one year when considering the prime interest rate and how often interest is compounded (interest on a savings account typically accrues daily).
Let’s say you put $1,000 into a savings account with an average interest rate of 0.42% with daily compounding. At the end of one year, your balance will grow to $1,004.21 – your initial deposit of $1,000, plus just $4.21 in interest.
Now let’s say you choose a high-yield savings account offering 4% APY instead. In this case, your balance would grow to $1,040.81 over the same period, which includes $40.81 in interest.
The more you deposit into a savings account, the more chances you have to earn. If we take our same example of a high-yield savings account with 4% APY, but you deposit $10,000, your total balance after one year will be $10,408.08, which means you will earn $408.08 in interest.
Read more: What is a good savings account rate?
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