Savings account rates have slipped in recent weeks, yet rates remain far higher than a year prior. While high yields are surely paramount in your evaluation of a potential savings account, don’t forget to take fees, customer service and customer-friendly digital experience into account as well.
Commonly referred to as “statement savings accounts” in the banking world, savings accounts paid infinitesimal yields after the Great Recession. The Fed maintained low borrowing costs for several years in order to bolster economic growth.
The landscape, however, became topsy-turvy after the government’s extensive spending during the pandemic. The Fed belatedly countered by increasing interest rates at an unprecedented pace in order to offset soaring inflation, prompting banks to raise rates for savers.
Savings account rates — $2,500 minimum deposit
The highest interest rate on a standard savings account today is 5.84%, per Curinos, the same as a week ago. Meanwhile, the average APY (annual percentage yield) for a traditional savings account, as reported by Curinos, is 0.23%, the same as last week.
APY represents the 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 $2,500 at a 5.84% rate (the current high) for one year, you would earn roughly $150 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 is 0.24%, a tick lower than last week. But remember that many banks offer considerably higher rates.
Some of the top high-yield savings accounts, for instance, currently feature rates of 4.00% or higher.
Per Curinos, the highest interest rate today on a savings account requiring a minimum deposit of $10,000 is 4.51%. If you were to invest $10,000 at a 4.51% rate (the current high) for one year, you would earn more than $460 in interest, assuming daily compounding and no additional contributions.
Methodology
To establish average savings account rates, Curinos focused on savings accounts intended for personal use. Savings accounts that fall into specific categories are excluded, including promotional offers, relationship-based accounts, private, youth, senior and student/minor. The average savings rates quoted above are based on a $2,500 or $10,000 minimum deposit amount.
Frequently asked questions (FAQs)
A savings account offers a secure space for you to store money that isn’t required for daily use. Keeping savings separate from your everyday funds can help reduce the temptation to spend impulsively.
A savings account can act as a rainy-day fund, earning interest while maintaining liquidity.
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.
