Average Savings Account Rates for the Week of April 15, 2024

The average savings account in the United States earns a 0.57% APY, according to Bankrate data. If you deposited $10,000 in a savings account that earned that average APY and left it alone for a year, you would earn $57 in interest. 

Savvy savers know that many banks offer much higher savings rates than average. Some online banks and credit unions feature high-yield savings accounts with annual percentage yields (APYs) ten times as high as the national average (sometimes more). 

Make sure to shop around if you want to earn more on your savings. You may also need to consider switching banks to grow your savings at a faster rate. Just because your current bank offered a competitive APY on your savings in the past doesn’t mean you’re still getting the best savings rates available.

What Is a Savings Account?

A savings account is a bank account you use to store cash you don’t plan to spend right away and earn interest on your money. Banks and credit unions offer these deposit accounts and, often, the federal government guarantees the money you deposit up to $250,000. 

If you have short-term goals like putting away money for vacations, holidays, celebrations, or other needs, a savings account may be a good solution. It can also be a wise tool to build an emergency savings fund you can tap into if unexpected expenses come up. 

Types of Savings Accounts

There are several types of savings accounts you can use. Here’s a look at the most common. 

Traditional Savings Accounts: A traditional savings account often features lower interest rates depending on the financial institution. But they tend to give you more flexibility when it comes to accessing your cash as well. Brick-and-mortar banks like Bank of America provide access to branches you can visit, and you can do your banking online. 

High-Yield Savings Accounts: A high-yield savings account (HYSA) is a type of savings account that typically offers a higher interest rate than a traditional savings account. Often HYSAs are available from online banks and credit unions rather than brick-and-mortar financial institutions. But the APYs on these types of accounts tend to be variable. As a result, the interest you earn may be subject to fluctuations over time. 

Money Market Accounts: Money market accounts are usually interest-bearing accounts that behave somewhat like a hybrid between a savings account and a checking account. If you open a money market account with an online bank, you may find competitive interest rates and low fees. Yet there may be limits on how often you can withdraw money from your account. 

Certificates of Deposit (CDs): A certificate of deposit is another type of savings account that may offer higher interest rates. Both traditional financial institutions and online banks offer these types of deposit accounts. With most CDs, you must agree to not withdraw cash from your account for a set period in exchange for the higher APY. If you make an early withdrawal, you’ll pay a penalty that could offset some or all of the interest you earned on the account.

Why Should You Open a Savings Account?

Pros

• Low-risk: If you open a savings account with an FDIC-insured financial institution, your deposits will be insured for up to $250,000 in the event of a bank failure.
• Easy access: With most savings accounts (aside from CDs), you have easy, penalty-free access to your cash whenever you want to make a withdrawal.
• Earn interest: Depositing your money in savings (especially a high-yield savings account with a competitive APY) may allow you to earn interest which could grow your cash faster than if it were in a checking account.

Cons

• Variable interest: Most savings accounts feature variable interest rates that can adjust up or down based on the market.
• Fees: Your financial institution may charge you fees which could offset any interest you earn on your savings.
• Other investments may pay more: Although savings accounts are safe and low risk, they tend to offer lower historical returns on your money than other investments if you have a long time horizon.

How to Choose the Best Savings Account for You

There’s no such thing as a perfect savings account. But it is possible to find a savings account that’s a good fit for your specific financial goals and needs. Here are some tips that may help. 

• List your priorities: Is your primary goal to earn the highest interest rate possible on your savings? Do you prefer a no-fee savings account? Before you start shopping for a new place to store your cash, it’s wise to make a list of the features that matter most to you in a new savings account. 
• Consider extra features: In addition to the must-have features you want in a new savings account, consider extra perks you might like to have as well, such as a bank bonus or the ability to divide your savings into multiple categories. 
• Compare Multiple Options: Take the time to shop around and compare savings account offers from several different financial institutions. It’s important to see the APYs, fees, and features that multiple banks offer to make sure you find the best deal available. 

What Does the Federal Reserve Have To Do With Savings Account Rates?

When the Federal Reserve increases the federal funds rate, banks tend to raise interest rates in response. This can be bad news if you’re carrying balance on revolving accounts like credit cards. But if you’re a saver, a higher federal funds rate could benefit you. 

The annual percentage yields or APYs that banks offer their customers typically increase when the Federal Reserve raises the federal funds rate. Since March 2022, the Federal Reserve raised rates 11 times. Meanwhile, the average savings account interest rate increased from 0.06% in March 2022 to 0.46% in December 2023 based on FDIC data.

Keep in mind that not all banks follow the federal funds rate when setting interest rates on savings accounts. Some large national banks like Bank of America and Chase still offer miniscule APYs to customers on savings accounts and other deposit accounts as well.

Compare the interest rates your bank offers along with the fees it charges and see how it measures up with other banks. Otherwise, you risk losing out on potential earnings.

Vault’s Viewpoint: Savings Rate Trends for 2024

At the last three meetings of the Federal Open Market Committee in 2023, the federal funds rate remained unchanged. Meanwhile, the Federal Reserve has indicated that rate cuts are likely in store for 2024. But Fed policymakers disagree about the timing of when a reduction in interest rates should happen. 

If and when the Federal Reserve decides to lower the federal funds rate this year, savers may see a reduction in their savings account interest rates to follow. Savers who are interested in locking in a higher interest rate for a set period of time might want to consider whether a certificate of deposit makes sense for their situation.

Methodology

Bankrate displays two sets of rate averages that are produced from two surveys conducted by Bankrate: one daily (“overnight averages”) and the other weekly (“Bankrate Monitor averages”).

The rates on this page represent Bankrate’s overnight averages. For these averages, APRs and rates are based on no existing relationship or automatic payments.