Key takeaways
- The top high-yield savings accounts are currently earning APYs of 5 percent and greater.
- By comparison, the national average savings account APY is just 0.59 percent.
- You’ll often find the most competitive APYs at online-only banks, which tend to pay higher rates than brick-and-mortar banks.
These days, it’s possible to find high-yield savings accounts that earn up to nine times the return they earned just a few years ago. Such elevated yields, along with federal deposit insurance, can make a savings account the best place to earn interest on funds earmarked for emergencies or other near-term financial goals.
What is a good savings account interest rate?
You’ll currently find high-yield savings accounts that earn annual percentage yields (APYs) of up to 5.35 percent. Such accounts are often available from online-only banks and credit unions.
It pays to shop around for an account that earns a high yield, given it’s not uncommon for savings accounts to earn much lower rates. For instance, the national average APY is just 0.58 percent, while many brick-and-mortar banks offer savings accounts earning just 0.01 percent APY — which is at least 500 times lower than the top available rates.
Unlike accounts that earn average or rock-bottom yields, many high-yield savings accounts are earning a rate that’s outpacing inflation — which is currently at an annual rate of 3.5 percent. Money that doesn’t keep up with inflation is losing purchasing power.
What would a savings account with a 5% APY earn in a year?
Putting money into a high-yield savings account today and leaving it there for a year is an easy way to build up your nest egg. While savings account APYs are variable — meaning the bank can raise or lower them any time at will — here’s approximately what various amounts would earn in interest in one year in a savings account that pays a 5 percent APY:
- $5,000: $256
- $10,000: $512
- $15,000: $767
- $20,000: $1,023
Where to find the best interest rate on a high-yield savings account
Savings account rates of up to 5.35 percent APY are currently offered by various banks, including the following:
| Savings account | APY | Required minimum deposit |
|---|---|---|
| BrioDirect High-Yield Savings | 5.35% | $5,000 |
| TAB Bank High Yield Savings | 5.27% | $0 |
| UFB Direct Secure Savings | 5.25% | $0 |
| EverBank Performance Savings | 5.15% | $0 |
| CIBC Bank USA Agility Account | 5.01% | $1,000 |
Note: Annual percentage yields (APYs) shown are as of April 11.
What the current rate environment means for savings accounts
Rates on high-yield savings accounts tend to move in lockstep with changes to the federal funds rate. This key benchmark rate is currently at a 23-year high after the Federal Reserve raised it 11 times in 2022 and 2023. Since July 2023, however, the Fed has held rates steady — and it may hold off on rate cuts in the near future due to lingering inflation.
In recent months, APYs have slipped slightly on some high-yield savings accounts, although it’s still easy to find an account with a rate that outpaces inflation.
“Persistent inflation will keep the Fed from cutting interest rates as soon, or as much, as many had hoped,” says Greg McBride, CFA, Bankrate chief financial analyst. “For savers, this means those high-yield savings accounts paying over 5 percent aren’t going away any time soon.”
Is a CD a good alternative to a savings account?
Because savings account APYs are variable, many savers consider a high-yielding, fixed-rate certificate of deposit (CD) if they believe savings account rates will fall soon. Top-yielding CDs are currently earning up to 5.36 percent APY. A CD usually guarantees the same rate for the entire duration of its term.
While it can pay to lock in a high yield, note that most CDs charge an early withdrawal penalty if you take out the money before the term is up. For this reason, a CD isn’t a good place for your emergency fund or other money you might need access to in the meantime.
Bottom line
It’s not hard to find high-yield savings accounts these days that earn upwards of 5 percent APY. Because standard savings accounts commonly earn the national average of 0.58 percent APY or less, it’s worth your time to shop around for an account that earns a highly competitive rate.
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