Published 9:19 am ET April 11, 2023
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Savings account rates have remained steady unchanged over the past week, though savers can earn much higher yields now compared to this time last year. This is a positive development but don’t forget to take into account fees, customer service and user-friendly digital experience when choosing an account.
Savings accounts — all deposit levels
Savings accounts, known as “statement savings accounts” in the banking industry, offered negligible yields in the aftermath of the Great Recession as the Fed slashed short-term rates to near zero, and kept them there for years, in order to hasten the economy’s recovery.
This status quo was upended after the federal government’s massive spending throughout the pandemic, which helped push inflation toward highs not seen in decades. The Fed responded to the economic effects of lockdowns and rounds of stimulus bills by boosting increasing interest rates to offset soaring inflation, prompting banks to (slowly) raise rates for savers.
The highest interest rate on a standard savings account today is 4.64%, per Bankrate, unchanged from a week ago. Meanwhile, the average APY (annual percentage yield) for a traditional savings account 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 4.64% rate (the current high) for one year, you would earn approximately $47 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 edged up to 0.25% over the past week. However, numerous financial institutions offer considerably higher rates.
Some of the top high-yield savings accounts, for instance, currently feature rates of 4.00% or higher.
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.
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.
