Saving money is an important habit and the foundation of a solid financial plan. But where you save your money matters, too. Savings interest rates today vary widely, but some of the best accounts offer annualized interest rates of 5% or more. Let's take a look at the best savings rates today and where to find them.
What's the best savings interest rate today?
Historically, interest rates on savings accounts have been high. However, traditional savings account interest rates pale in comparison to the interest rates offered by high-yield savings accounts.
For example, the average interest rate on a savings account is just 0.45%, but the best savings account rates are usually around 4.5% to 5% annual interest. As of June 26, 2024, the best savings account interest rate offered by our partners is 5.36%.
Below are some of the best discount rates currently available, offered by our certified partners.
Related: 10 Best High Yield Savings Accounts June 2024 >>
Will savings rates fall soon?
Interest rates on savings accounts, including savings rates, are tied to the federal funds rate. This is a target interest rate set by the Federal Reserve, and when that rate increases, savings account rates typically rise as well. Conversely, when the Federal Reserve cuts interest rates, savings account rates fall.
The Federal Reserve has maintained its current interest rate at 5.25% to 5.50% since July 2023. However, experts agree that as inflation subsides, the Fed will likely start cutting interest rates later this year, possibly as soon as November.
If the Federal Reserve cuts interest rates, savings rates will likely start to fall as well, meaning now may be savers' last chance to take advantage of today's high interest rates.
Read more: I-bonds vs. high-yield savings accounts: Which is better for beating inflation?
Is now a good time to put money into a savings account?
Deciding where to put your money is an important decision, and there are a number of factors to consider when evaluating your options. If you want a safe place to store your short-term savings while still earning a steady rate of return, a high-yield savings account may be right for you. Here are some key considerations:
Interest rate: One of the most important features of a savings account is the interest rate. To ensure your money grows over time, it's important to shop around and compare the best offers. Considering that savings interest rates are likely to fall in the near future, opening a high-yield savings account now will allow you to take advantage of historically high interest rates.
Goals: Today's high-yield savings accounts offer interest rates not seen in over a decade. That said, savings rates still fall short of the average stock market return. If you're saving for a long-term goal like retirement, a savings account probably isn't the best place to put your money because your balance won't grow at a rate that will help you reach your goal. But if you're saving for an emergency fund, a down payment on a house or car, holiday gifts, or other short-term goals, a savings account is a great place to park your funds.
Accessibility: Certain types of accounts and investments may offer higher yields than savings accounts, but they may make it harder to access your funds in an emergency. For example, if you put your savings in a certificate of deposit (CD) and need to access your funds before the maturity date, you may be subject to early withdrawal penalties. So if you want your savings to be available when needed, a high-yield savings account may be a better choice.
Safety: In most cases, savings accounts are insured by the FDIC up to federal limits, and your money won't be lost due to market fluctuations, making them a low-risk option.
Read more: Can you negotiate higher savings deposit interest rates with your bank?