Thanks to several interest rate hikes by the Federal Reserve, current savings account interest rates are at their highest in a decade. That said, savings account interest rates vary widely from bank to bank, so when shopping for a savings account, it's important to make sure you're getting the best rate possible. Below is a breakdown of current savings account interest rates and where to find the best offers.
Summary of today's savings rates
According to the FDIC, the national average savings account interest rate is 0.45%. While that may not seem like much, it's a steep increase in a short amount of time when you consider that just two years ago it was only 0.07%.
This is mainly due to the Federal Reserve's monetary policy decisions, which began raising their benchmark interest rate in March 2022 to combat soaring inflation. Since then, the Fed has raised interest rates 11 times, but has paused further rate hikes in 2024. Experts expect the Fed to finally start lowering its target rate later this year, which means that deposit account interest rates, including savings rates, will likely start to fall.
While the national average savings interest rate is fairly low compared to other types of accounts (such as CDs) and investment accounts, the best savings rates on the market today are much higher. In fact, some of the top accounts are currently offering APYs of over 5%. These rates may not last long, so consider opening a high-yield savings account now to take advantage of today's high interest rates.
Below are some of the best discount rates currently available, offered by our certified partners.
Related: 10 of the best high-yield savings accounts today>>
How much interest can you earn on a savings account?
The amount of interest you earn from a savings account is determined by the Annual Percentage Yield (APY), which is a measure of your total earnings after one year, taking into account the base interest rate and the compounding rate of your interest (interest on savings accounts is usually compounded daily).
For example, if you put $1,000 into a savings account that pays an average interest rate of 0.45%, compounded daily, after one year you will have $1,004.52 in your account balance – that's your original $1,000 deposit plus the $4.52 in interest you've earned.
Now, let's say you instead choose a high-yield savings account with a 5% annual interest rate. In this case, your balance would grow to $1,051.27 over the same period, which includes $51.27 in interest.
The more money you put in a savings account, the more interest you're likely to earn. In the same example, if you put $10,000 in a high-yield savings account that pays 5% annual interest, your total balance after one year would be $10,512.67, meaning you'd earn $512.67 in interest.
Read more: What is a good savings account interest rate?