Average Savings Account Rates for the Week of September 30, 2024

The average savings account in the United States earns a 0.60% 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 $60 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.

Date	National average APY
09/23/2024	0.60%
09/16/2024	0.61%
09/09/2024	0.61%
08/29/2024	0.59%
08/19/2024	0.60%
08/12/2024	0.61%
08/05/2024	0.59%
07/29/2024	0.61%
07/22/2024	0.60%
07/15/2024	0.59%
07/08/2024	0.60%
07/01/2024	0.59%
06/24/2024	0.59%
06/17/2024	0.58%
06/10/2024	0.58%
06/03/2024	0.61%
05/28/2024	0.58%
05/20/2024	0.59%

Reliable Rates From Vault

Please note that the annual percentage yields (APYs) listed are accurate as of the date of publication. As financial rates can fluctuate, the current APYs may differ. We strive to update our data regularly to reflect these changes. For our complete methodology, please refer to the “Methodology” section at the end of the article.

Vault’s Viewpoint: Savings Rate Trends for 2024

As of the most recent Federal Open Market Committee (FOMC) meeting in March 2024, the federal funds rate remained unchanged at 5.25% to 5.50%—a 23-year high it first reached in summer of 2023. Although many people expected multiple rate cuts this year, Federal Reserve Chair Jerome Powell has indicated that rates may remain high for longer than originally anticipated. Policymakers at the March meeting stated that they still expect to cut rates by three-quarters of a percent by the end of 2024, but specific timing for this plan remains unclear. 

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. 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.

Understanding Savings Account Interest Rates

Banks don’t choose their interest rates out of thin air; there’s a method to it. Here’s how savings account interest works and what factors affect banks’ rates.

How Does a Savings Account Earn Interest?

Even though most savings accounts pay compound interest by default, it’s helpful to understand the difference between simple and compound interest. Both are expressed as an APY—a figure that essentially tells you how much money you’ll earn by the end of the year—but there are core differences in their underlying mechanisms. 

Simple interest is calculated only on your principal, meaning the money you’ve personally deposited. If you deposit $10,000 into a savings account that pays simple interest with a 5% APY, you’d receive equal payments each month and have $10,500 at the end of the year. The following year, if you didn’t add any new principal, the interest would start accumulating again on the original $10,000 balance and you’d earn another $500 for the year, bringing your total account balance to $11,000.

With compound interest, your interest earnings get added to your principal every time there’s a compounding period. This means that effectively, your interest will also start earning interest, which rapidly increases your overall earning potential. Exact calculations will depend on the compounding frequency, which could be daily, weekly, monthly or annually. But no matter what the compounding frequency is, the APY is always expressed as a final result of those calculations, so you don’t have to do the math yourself. Usually, accounts with more frequent compounding will have higher APYs.

Let’s revisit that savings account with a 5% APY—but this time it has compounding interest. You’d still earn $500 in interest for the first year and have $10,500 at the end. But the following year, you would earn 5% APY on your whole $10,500 balance since the $500 of interest was added to your principal. Therefore, you would earn $525 of interest in year two and increase your balance to $11,025, which would in turn form the basis for year three’s earnings.

Since most savings accounts pay compound interest, you’ll automatically start earning interest on your interest right away.

Factors That Impact Average Savings Account Interest Rates

There are several key considerations that go into determining savings interest rates at banks. As mentioned earlier, the federal funds rate is one of the biggest factors. This number can go up or down based on current economic conditions, and many banks use it to determine how much interest they pay on their own savings products. But ultimately, they are in charge of their own rates and don’t have to consider the federal funds rate at all if they choose not to. 

That means an even more relevant factor is competition among banks of similar types. You may notice that most big banks with a wide brick-and-mortar network tend to have incredibly low savings account interest rates, while online banks can afford to pay more since their other expenses are lower. If you’re looking to maximize your earnings, store your savings in a high-yield account with an online bank.

How To Maximize Your Interest Rate on Your Savings Account

Like everything else in life, it pays to do better than average when it comes to earning interest on savings. The following strategies can help you earn more interest and grow more wealth over time.

Jump Ship to a New Bank

Don’t stick with a bank that offers the average rate on savings (or anywhere close to it). There are so many banks out there that choose to do better, and many of them offer accounts without a bunch of fine print or fees.

As just one example, BMO Alto has a savings account with 5.10% APY, with no minimum deposit required and no monthly fees to keep track of or avoid.

Combine Savings and Checking

You can also look into savings accounts that have a checking account attached. For example, banking with SoFi requires you to have both checking and savings (you can’t get just a savings account). However, there are zero account fees, and you get perks like FDIC insurance on deposits up to $2 million. 

You can access your money with a debit card at more than 55,000 ATMs as well, and the savings part of the account earns 4.50% APY. There are no overdraft charges, either.

Consider an Online Bank

Brick-and-mortar banks in your area won’t offer the best rates on savings, and some of the biggest banks might as well be offering zero.

That said, a range of online banks offer competitive rates with no fees or fine print, although you’ll have to give up on in-person bank visits and do all of your banking virtually instead.

Compare Banks and Credit Unions

Also, remember to compare both banks and credit unions, including options in your area and online. Credit unions tend to offer great rates for savings and competitive rates on loans since they are member-owned and operate on a not-for-profit basis.

Watch Out for Hidden Fees and Terms

No matter which new savings account catches your eye, make sure to check for hidden fees and fine print that can eat away at your savings returns. Some banks charge monthly fees if you don’t keep a specific amount of money in your savings account all the time. Others have steep minimum opening balance requirements that can put them out of reach until you grow your account balance.

Try To Earn a Bank Bonus

Some banks offer bonus cash if you open an account and meet other requirements. You might have to set up direct deposit or keep a specific amount on deposit, for example, and you’re almost always required to keep your account open for a specific number of days or months.

Look Into Other Savings Account Types

Look into alternative savings products like CDs and money market accounts. Where savings accounts make it possible to access your funds at any time, CDs “lock up” your funds for a while (usually three to 60 months) but offer a generous fixed rate of return. However, you typically have to pay a penalty to cash in a CD before its term is up.

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.

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?

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. 

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.

Newsweek writer Kate Braun contributed to this post.