Current interest rates on savings accounts are among the highest we’ve seen in more than a decade, due to several rate hikes by the Federal Reserve. Still, savings interest rates vary widely from bank to bank, so it’s important to make sure you’re getting the best possible interest rate when shopping for a savings account. Below is an overview of today’s savings interest rates and where you can find the best offers.
Overview of savings interest rates today
According to the FDIC, the national average interest rate on savings accounts is 0.46%. This may not seem like much, but consider that just two years ago this was just 0.07%, reflecting a sharp increase in a short period of time.
This is largely due to the monetary policy decisions of the Fed, which began raising its benchmark interest rate in March 2022 to combat skyrocketing inflation. Since then, the Fed has raised rates 11 times, although it has halted further rate hikes in 2024. Experts believe the Fed will eventually cut its target interest rate in September, meaning interest rates on deposit accounts, including savings rates, are likely to fall. .
Although the national average savings rate is quite low compared to other types of accounts (like CDs) and investments, the best savings rates on the market today are much higher. In fact, some of the best accounts currently offer more than 5% APY.
For example, Poppy Bank currently offers the highest savings account interest rate of 5.50% APY for its Premier Online Savings Account. The minimum opening deposit is $1,000 and this rate is guaranteed for three months.
Betterment also offers an account with 5.50% APY. However, this is a cash management account for brokerage clients and not a traditional savings account. There is no minimum opening deposit required.
Since these interest rates may not be around for much longer, consider opening a high-yield savings account now to take advantage of today’s high interest rates.
Here’s a look at some of the best savings rates available today from our verified partners:
Related: Today’s 10 Best High Yield Savings Accounts >>
How much interest can I earn with a savings account?
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 rate and how often the interest is compounded (interest on savings accounts is typically compounded daily).
Suppose you put € 1,000 in a savings account at an average interest rate of 0.45% with daily interest increases. At the end of a year, your balance would rise to €1,004.52 – your initial deposit of €1,000, plus only €4.52 in interest.
Now suppose you choose a high-yield savings account that offers 5% APY instead. In this case, your balance will grow to €1,051.27 in the same period, including €51.27 in interest.
The more you deposit into a savings account, the more you can earn. If we take the same example of a high-yield savings account with a 5% APY interest rate, but deposit $10,000, your total balance after one year would be $10,512.67, meaning you would earn $512.67 in interest.
Read more: What is a good savings account interest rate?