Savings account rates have moved higher over the past week, and savers can earn much higher yields now compared to this time last year. This is a positive development, to be sure, but make sure you consider fees, customer service and user-friendly digital experience when selecting a savings account.
Commonly referred to as “statement savings accounts” in the banking world, savings accounts paid minimal 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 around $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 0.23%, a tick higher than last 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.
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)
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.
