In late 2024, the Federal Reserve implemented three rate cuts, leading to a decrease in savings interest rates from their previous historic highs. It’s crucial to ensure you’re securing the most favorable rate while exploring savings account options. Below is a summary of current savings interest rates and tips on locating the best offers.
According to the FDIC, the national average savings account rate is currently 0.41%. While this may appear modest, it’s worth noting that just three years ago this rate was only 0.06%, indicating a significant increase in a brief timeframe.
Currently, our partners are providing the highest savings account rate of 4.50% APY from Jenius Bank, which requires no minimum opening deposit.
As these rates may not last indefinitely, it could be beneficial to open a high-yield savings account to capitalize on today’s elevated rates.
Here’s a glimpse of some of the top savings rates currently available from our vetted partners:
Related: 10 best high-yield savings accounts today>>
Your potential earnings from a savings account are determined by the annual percentage yield (APY), which reflects your overall earnings after one year, factoring in the base interest rate and the frequency of compounding (interest in savings accounts typically compounds daily).
For example, if you deposit $1,000 in a savings account with the average interest rate of 0.41% and daily compounding, your balance would amount to $1,004.11 after one year, which includes your original $1,000 plus $4.11 in interest.
Conversely, if you opt for a high-yield savings account offering 4% APY, your balance would increase to $1,040.81 after one year, reflecting $40.81 in earned interest.
The more you deposit into a savings account, the more you have the potential to earn. If we apply the same 4% APY to a deposit of $10,000, your total balance at the end of the year would be $10,408.08, which means you’d gain $408.08 in interest.
Read more: What is a good savings account rate?
