Published 11:18 a.m. ET May 11, 2023
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Savings account rates haven’t budged in recent weeks, though savers can earn much higher yields now compared to this time last year. While you should prefer higher rates when you’re selecting a savings account, make sure you also take into consideration account fees, customer service and whether you can easily bank online.
Savings accounts provided anemic yields following the Great Recession thanks to the Fed keeping borrowing costs low in order to cajole economic growth.
This low rate environment was abandoned, however, following the government’s extensive spending during the pandemic, which caused the Fed to significantly boost interest rates to offset soaring inflation. That then prompted banks and credit unions to raise rates for savers.
Savings accounts — all deposit levels
The highest interest rate on a standard savings account today is 4.80%, per Bankrate, the same as a week ago. Meanwhile, the average APY (annual percentage yield) for a traditional savings account, as reported by Bankrate, is 1.28%.
APY represents the actual return your account will generate in a year, taking into account compound interest — the interest earned on both the principal and previously accumulated interest in your account.
For instance, if you were to invest $1,000 at a 4.80% rate (the current high) for one year, you would earn around $50 in interest, assuming daily compounding and no additional contributions.
Savings account rates — $10,000 minimum deposit
The average APY for savings accounts requiring a minimum deposit of $10,000 was 0.25%, unmoved over the past week. However, numerous financial institutions offer significantly higher rates.
Some of the top high-yield savings accounts, for instance, currently feature rates of 4.00% or higher.
Frequently asked questions (FAQs)
The ideal savings account for you hinges on your priorities.
If you already have a relationship with a bank or credit union, such as a checking account or loan, opening a savings account should be straightforward. If you value face-to-face banking, consider an institution with physical branches near your residence.
A high-yield savings account is essentially a standard savings account that offers a higher interest rate on deposits. (It’s more of a description than a technical definition.) This rate can fluctuate based on the broader financial market and the specific bank or credit union’s business requirements.
A high-yield savings account is still a savings account—you can’t access your funds by writing checks and your withdrawals are typically limited.
Blueprint is an independent publisher and comparison service, not an investment advisor. The information provided is for educational purposes only and we encourage you to seek personalized advice from qualified professionals regarding specific financial decisions. Past performance is not indicative of future results.
Blueprint has an advertiser disclosure policy. The opinions, analyses, reviews or recommendations expressed in this article are those of the Blueprint editorial staff alone. Blueprint adheres to strict editorial integrity standards. The information is accurate as of the publish date, but always check the provider’s website for the most current information.
