What is the average interest rate for savings accounts?

It’s an ideal time for stashing away your cash

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Savings accounts, whether with an online bank or brick-and-mortar option, can offer a simple method of stashing cash away while earning interest. Picking the best savings account often starts with looking at the annual percentage yield, or APY.

At the time of publishing, the national APY average is 0.46% according to the latest data from the Federal Deposit Insurance Corporation, but you can find numerous savings account options offering APYs several times the national average. Here’s a closer look at the average interest rates for savings accounts, so you can determine where you can get the most out of your own savings.

Key insights

The FDIC reports the national average savings rate is 0.46% APY for savings accounts, while CD interest rates average 0.22% to 1.81%.

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These are only averages — you can find numerous options with higher earning potential.

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Online banks typically offer higher interest rates for savings, although interest rates fluctuate and can change at any time.

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National average savings account interest rates

A savings account is one of the more basic financial services available, but it can offer a simple way to save for financial goals or emergencies. The best part is that your money can grow while it’s tucked away in a savings account, but it all depends on the interest rate it earns. You typically must make an initial opening deposit and can then add money to the account as it becomes available. You can also withdraw from it as needed, although many institutions put a limit to the number of withdrawals allowed per month fee-free.

Another popular savings vessel is a high-yield savings account (HYSA). These operate in the same manner as a savings account but offer a much higher interest rate versus the national average. You’ll typically find these with online financial institutions, versus brick-and-mortar banks and credit unions. Like a savings account, they’re subject to withdrawal limitations and may require a higher opening deposit versus a regular savings account.

Savings account APY comparison

Here is a snapshot of available savings account options, including those with higher-than-average APYs.

» MORE: What is a savings account and how does it work?

Certificates of deposit

Another savings account option is a certificate of deposit (CD). The main difference between a CD and a savings account is that with a CD, your money is locked in for a certain amount of time (the term). You can’t withdraw your funds during this time unless you pay a withdrawal fee (or select a CD without an early withdrawal penalty). Popular term lengths are anywhere from three months to five years. Although there are withdrawal restrictions, the interest rate is typically higher versus a basic savings account.

CD APY comparisons

» MORE: CDs versus savings accounts: Which is right for you?

How to choose a savings account

If you’re considering opening a savings account, the most important step is deciding what your main financial goals are. Is your goal to earn the highest interest rate in the shortest amount of time? Or do you need an account with considerable flexibility for withdrawing funds on a regular basis?

Finding a savings account with the highest interest rate possible, no account fees, low minimums and flexible deposits, transfers and withdrawals can offer you the most well-rounded savings account. Also, you may consider using the same financial institution as your checking account, which means easier daily management and often allows for instant transfers when linked.

In addition to interest rates, other essential considerations for savings accounts include:

  • The monthly fee schedule
  • Online or mobile app access
  • The number of in-network ATMs near you
  • Online reviews and ratings
  • Customer service hours and access
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How does an online savings account work?

Online savings accounts are convenient options for those who prefer on-the-go banking or want to get a higher interest rate versus what traditional brick-and-mortar banks tend to offer. Online savings accounts typically allow deposits via mobile check deposit, mailed check, electronic transfers or direct deposit. While in-person services are limited, these accounts often offer higher interest rates. Other than the in-person service aspect, these accounts typically work the same as ones with brick-and-mortar locations.

Are online savings accounts safe?

Online savings accounts are safe if they’re insured by the FDIC. First, look for the “Member FDIC” logo or verbiage on the financial institution’s site; if you can’t find it, you can also search the FDIC website and its insured institutions list, if needed. Before opening an online savings account, check to ensure it requires two-factor authentication, which offers a greater level of protection. It’s also a wise practice to check the online bank’s fraud protection policy in case there is a data breach.

Can I make payments from a savings account?

Yes, you can make payments from a savings account if needed, however, you may want to think twice before doing so. While making payments from a savings account occasionally and if for a particular financial goal can be convenient, withdrawing funds too much can negate the purpose of your savings account. Bear in mind many financial institutions put a limit on the number of transfers each month too.

Bottom line

While the national average for savings accounts may be sitting around 0.46%, you may have the opportunity to earn a much higher interest rate. You can find a number of savings account options, including through online financial institutions, that offer not only higher rates, but a wide range of convenient account management options, low account minimums and low monthly fees. Shopping around and comparing multiple accounts can end up helping you secure the best savings account for your short- or long-term financial goals.

Article sources
ConsumerAffairs writers primarily rely on government data, industry experts and original research from other reputable publications to inform their work. Specific sources for this article include:
  1. Federal Deposit Insurance Corporation, “National Rates and Rate Caps.” Accessed April 29, 2024.
  2. Federal Trade Commission, “Use Two-factor Authentication to Protect Your Accounts.” Accessed April 29, 2024.
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