The Federal Reserve cut its target rate three times by the end of 2024, meaning savings interest rates are falling. Therefore, it’s important to make sure you’re getting the best rate possible 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. This may not seem like much, but consider that three years ago, it 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 higher. In fact, some of the top accounts currently offer an APY of 4% and more.
Today, the highest savings account rate available from our partners is 4.30% APY. This rate is offered by BMO Alto and no minimum opening deposit is required.
Below are some of the best savings rates available today from our verified partners:
Related: Today’s 10 Best High-Yield Savings Accounts >>
The amount of interest you can earn with a savings account depends on the annual percentage rate (APY). This is a measure of your total earnings after one year by taking into account the base interest rate and how often the interest is compounded (interest on savings accounts is typically compounded daily).
Let’s say you deposit $1,000 into a savings account at an average interest rate of 0.42% compounded daily. At the end of a year, your balance would 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 that offers 4% APY. 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 you can earn. If we took the same example of a high-yield savings account with a 4% APY, but deposited $10,000, your total balance after one year would be $10,408.08, meaning you would earn $408.08 in interest.
Read more: What is a good rate for a savings account?