April 15, 2024 – Forbes Advisor – Technologist

Rates on savings accounts are mixed compared to one week ago. You can now earn 5.84% or higher on your savings.

In the market for an account where you can save for a rainy day or retirement? Here’s a look at some of the best savings rates you can find today.

Related: Compare the Best High-Yield Online Savings Accounts

Traditional Savings Account Rates Today

Traditional savings accounts, called “statement savings accounts” within the banking industry, are notorious for paying puny interest rates. That’s starting to change, thanks to the Fed’s campaign of interest rate hikes to combat inflation.

Today’s highest rate on a standard savings account with a $2,500 minimum deposit requirement is 5.84%, according to data from Curinos. If you land a basic savings account with a rate in that general area, you’ve found a good deal. One week ago, the best yield also was 5.84%.

Today’s average APY for a traditional savings account is 0.24%, Curinos says. APY, or annual percentage yield, depicts the actual return your account will earn in a year. It includes compound interest, which is interest that builds on the interest already in your account.

High-Yield Savings Account Rates Today

High-yield savings accounts typically pay much higher interest than conventional savings accounts. But the thing to know is you may have to meet strict conditions laid down by the bank or credit union. Often, that means making a large deposit to open the account.

On high-yield accounts requiring a minimum deposit of $10,000, today’s best interest rate is 5.35%. That’s unchanged from one week ago.

On high-yield savings accounts with a minimum opening deposit of $25,000, the highest rate offered today is 4.97%. You’ll be in good shape if you can nail down an account offering a rate close to 4.97%. Last week at this time, the best rate was a similar 4.97%.

The current average is 0.25% APY for a high-yield account with a $25,000 minimum deposit. That’s the same as last week’s APY.

How To Choose a Savings Account

When you’re shopping around for a traditional savings account, high-yield savings account or MMA, you’ll want to keep a few things in mind.

A great interest rate is important, but it’s not the only factor that matters when selecting an account to hold your savings. Another major consideration is whether the account has a minimum deposit—and whether you can meet that requirement.

You’ll also want to understand the fees. Savings accounts can come with monthly maintenance fees, excess transaction fees (if you ignore limits on withdrawals) and other bothersome charges that can eat into your returns.

And before you open an account, look into a financial institution’s reputation and safety. You should trust your bank or credit union and feel like you’re in good hands. Check the reviews, see what other consumers have to say about customer service and find out how the financial institution responds to consumer questions.

Search for an account that’s insured by the FDIC or, in the case of credit unions, the NCUA. Those federal agencies provide up to $250,000 in insurance per depositor and per bank for each account ownership category.

How Often Do Savings Account Interest Rates Change?

Interest rates on savings accounts typically fluctuate in response as other rates change throughout the economy. Savings rates are primarily influenced by the Federal Reserve’s rate moves, and the central bank has recently been raising its benchmark federal funds rate in an attempt to get inflation under control.

But while financial institutions are usually quick to raise credit card rates and other borrowing costs as the Fed raises rates, they tend to stall when it comes to increasing interest rates on savings. Rates on savings accounts have been rising little by little, and that’s likely to continue throughout 2023.

Methodology

Curinos determines the average rates for savings accounts by focusing on those intended for personal use. Certain types of savings accounts—such as relationship-based accounts and accounts designed for youths, seniors and students—are not considered in the calculation.