The Federal Reserve lowered its target rate three times at the end of 2024, meaning savings interest rates are falling. So it’s important to make sure you get the best possible rate when looking for a savings account. The following is a breakdown of current savings interest rates and where to find the best deals.
The national average savings account rate is 0.42%, according to the FDIC. That may not seem like much, but consider that three years ago that figure was just 0.06%.
Although the national average savings interest rate is quite low compared to other types of accounts (such as CDs) and investments, the best savings rates on the market today are much more students. In fact, some of the best accounts currently offer an APY of 4% and above.
Today, the highest savings account rate available from our partners is 4.75% APY. This rate is offered by Openbank and a minimum opening deposit of $500 is required.
Here’s a look at some of the best savings rates available today from our verified partners:
Related: 10 Best High Yield Savings Accounts Today>>
The amount of interest you can earn on a savings account depends on the annual percentage rate (APY). This is a measure of your total earnings after one year, taking into account the base interest rate and how often interest compounds (savings account interest typically compounds daily).
Let’s say you put $1,000 into a savings account with an average interest rate of 0.42% with daily compounding. After a year, your balance would reach $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 that offers a 4% APY. In this case, your balance would increase to $1,040.81 over the same period, which includes $40.81 in interest.
The more you deposit into a savings account, the more likely you are to win. If we take our same example of a high yield savings account at 4% APY, but deposit $10,000, your total balance after one year would be $10,408.08, meaning you would earn $408.08 $ interest.
Learn more: What is a good savings rate?
