If you're looking to boost your savings, a high-yield savings account can offer competitive rates and help you grow your balance faster. However, not all banks offer high interest rates, so it's important to compare different banks to find the most competitive savings interest rate. Read on to learn more about where to find the best savings interest rates.
What's the best savings interest rate today?
Interest rates on savings accounts have been trending upward over the past couple of years. However, rates vary widely, and interest rates on traditional savings accounts are still fairly low compared to other types of deposit accounts and market investments. According to the FDIC, the average interest rate on a savings account is just 0.45%.
The good news is that many high-yield savings accounts offer interest rates of 5% or more per year. The highest rates are usually offered by online banks, but you may be able to find comparable savings rates at some credit unions and community banks.
Below are some of the best discount rates currently available, offered by our certified partners.
Related: 10 Best High Yield Savings Accounts>>
Savings Account Interest Rate Predictions for 2024
After years of near-zero interest rates, the Federal Reserve began raising the federal funds rate to combat runaway inflation, which in turn caused savings rates to soar as well, reaching their highest level in 15 years.
However, savings account rates are starting to plateau as the Fed keeps its target rate unchanged for 2024. As inflation subsides, the Fed is expected to start cutting interest rates later this year, possibly as soon as November.
Although the federal funds rate does not directly affect savings rates, they are correlated: when the Fed cuts rates, savings rates are expected to follow suit. How sharply rates fall depends on how severely the Fed cuts rates.
It's difficult to predict exactly how and when interest rates will change in the future, but one thing is for sure: today's high savings rates won't last forever, so if you're looking to grow your savings and take advantage of some of the best rates on the market, now is the perfect time.
How to open a regular savings account
Requirements for opening a savings account vary by financial institution, but when you're ready to open an account, follow these general steps:
Research the savings account interest rate: Of course, one of the most important factors to evaluate when choosing a savings account is the interest rate. To help your money grow, choose a savings account with a competitive interest rate.
Know your must-haves: While a savings account interest rate is your top priority, it shouldn't be your only factor to consider. You should think about what else you want from your account, such as no minimum balance requirements, low fees, or other perks. It's important to find a savings account with a stable interest rate that will help you reach your goals.
Get your documents ready: To open a bank account, you'll need to provide some important personal information and documents. Before you begin your application, make sure you have your Social Security number, driver's license or passport number, and proof of address ready.
Fill out an application: In many cases, you can apply for a savings account online. However, some financial institutions require you to apply in person at a branch. Either way, applying for a new savings account takes just a few minutes, and approval decisions are often received quickly.
Add funds to your account: Once your savings account application is approved, you'll need to add funds to your account. Be sure to check the minimum opening deposit requirements and the funding schedule.
Read more: Steps to opening a high-yield savings account