Best savings account interest rates today, December 6, 2024; get an APY up to 5%

Savings rates today: Earn up to 5%

Here are the best high-yield savings account interest rates you can find right now:

For comparison, the national average savings rate right now is 0.43%.

How does the Federal Reserve impact savings account rates?

The Federal Reserve’s decisions on interest rates influence savings account rates significantly. When the Fed raises its benchmark rate, banks typically increase the interest they offer on savings accounts to remain competitive. Conversely, when the Fed lowers rates, savings account yields tend to decrease.

But it’s not always a perfect mirror. Banks may make decisions to raise or lower their rates based on a variety of factors, including their own financial goals, promotions for bringing in new customers, and market conditions.

How often do savings account rates change?

Savings account rates can change at any time, often without notice. Changes typically occur after Fed meetings, which happen about eight times per year. However, some banks may adjust rates more frequently depending on whether they’re trying to make themselves more competitive or react to other curveballs in the market.

Will savings account rates go down soon?

Savings account rates are likely to decrease in the near future. The Fed cut rates two consecutive times in September and November, and further cuts are expected in the future. As a result, many banks have already started lowering their savings account APYs.

FDIC average national deposit rates: January 2020 to October 2024

High-yield savings accounts vs. traditional savings accounts: What’s the difference?

The main difference between high-yield and traditional savings accounts is the interest rate offered. High-yield accounts typically offer rates that are 10 to 20 times higher than traditional accounts. For example, while the national average savings rate is 0.43%, many high-yield accounts offer rates above 4%.

Traditional accounts often have physical branch access with lower rates, while high-yield accounts are typically offered by online banks with higher rates but limited in-person services.

Should I open a high-yield savings account?

Opening a high-yield savings account can be beneficial for several reasons:

• Higher interest rates than traditional savings accounts
• Often have no minimum balance requirements or monthly fees
• Funds remain liquid and easily accessible
• Ideal for emergency funds or short-term savings goals
• FDIC-insured, providing the same protection as traditional banks

How to compare the best savings accounts

When comparing savings accounts, consider the following factors:

• Interest rates: Look for competitive APYs to maximize your earnings.
• Low or no minimums: Many high-yield accounts have no minimum balance requirements.
• No monthly fees: Avoid accounts with monthly maintenance fees that can eat into your savings.
• Accessibility of funds: Ensure you can easily withdraw or transfer money when needed—some banks have withdrawal limits.
• Security and insurance: Verify that the account is FDIC-insured.

Other deposit accounts to save and grow your money

If you have money you want to store away, you have more options than a savings account:

• Money market accounts (MMAs): Often offer higher rates than traditional savings accounts and may come with check-writing privileges.
• Certificates of deposit (CDs): Provide higher rates in exchange for locking your money away for a set term length.
• High-yield checking accounts: Have higher interest rates than typical checking accounts but may have minimums or monthly fees.

The takeaway

High-yield savings accounts continue to offer competitive rates, even as the Fed has begun cutting interest rates. While rates may decline in the coming months, these accounts still provide significantly higher returns than traditional savings accounts.

To maximize your savings, consider opening a high-yield account with a competitive rate and favorable terms. Regularly compare rates across different institutions to ensure you’re getting the best possible return on your money.

Frequently asked questions 

What is compound interest?

Compound interest is when you earn interest on both your principal balance and previously earned interest, accelerating your savings growth.

Do I need to pay taxes on a savings account?

Yes, interest earned on savings accounts is considered taxable income and must be reported to the IRS.

Which is best: Fixed rates or variable rates?

Variable rates can offer higher initial returns but may fluctuate, while fixed rates provide stability. The best choice depends on your financial goals and risk tolerance.

How do banks make money on savings accounts?

Banks use the money deposited in savings accounts to make loans to other customers, earning interest on those loans.

Is my money safe in an online-only bank or neobank?

As long as the bank is FDIC-insured, your money is protected up to $250,000 per depositor, per account ownership category, regardless of whether it’s an online-only bank or a traditional institution.