October 22, 2024 – Forbes Advisor – Technologist

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

Shopping for an account where you can park some cash? Here’s a look at some of the best savings rates you can find today.

Related: Compare the Best High-Yield Savings Accounts

Traditional Savings Account Rates Today

Traditional savings accounts, called “statement savings accounts” within the banking industry, are known for paying paltry interest rates. But this isn’t always the case. Many online banks and credit unions likely pay rates 10x higher than your neighborhood bank.

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 ballpark, 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 0.23%, Curinos says. APY, or annual percentage yield, shows 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 generally pay much higher interest than conventional savings accounts. But the catch is you may have to jump through some hoops for 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 4.64%. You’ll be in good shape if you can get an account offering a rate close to 4.64%. Last week at this time, the best rate was a similar 4.64%.

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

How To Choose a Savings Account

If you’re shopping around for a traditional savings account, high-yield savings account or MMA, you’ll want to consider some essential points.

A high interest rate is important, but it’s not the only factor that matters when picking 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 be alert for fees. Savings accounts can come with monthly maintenance fees, excess transaction fees (if you ignore limits on withdrawals) and other bothersome charges that can erode your returns.

And before you open an account, explore a financial institution’s reputation and safety. You should trust your bank or credit union and feel like you’re in good hands. Scan the reviews, see what people have to say about customer service and check 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 to other rate changes throughout the economy. Savings rates are primarily influenced by the Federal Reserve’s rate moves, and the central bank has finally begun reducing its benchmark federal funds rate as inflation has fallen closer to the Fed’s 2% goal.

Financial institutions usually adjust borrowing and savings rates soon after the Fed changes rates. The Fed votes to adjust rates eight times per year during meetings of the Federal Open Market Committee (FOMC).

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.