Rates on the full range of savings accounts are increasing as the Federal Reserve raises interest rates. Shopping for an account where you can put some money aside? Here’s a look at the best savings rates you’ll find today.
Related: Compare the Best High-Yield Savings Accounts
Savings Rates Today: Traditional Savings Account
Traditional savings accounts, called “statement savings accounts” within the banking industry, have been notorious for paying teensy interest in recent years. That’s slowly changing, thanks to the Fed.
Today’s highest interest rate on a standard savings account is 3.11%, according to data from Bankrate.com. If you land a basic savings account with a rate in that general area, you’ve found a good deal. One week ago, the best rate was 2.90%.
The national average rate is just 0.17%, according to the most recent data from the FDIC, the government agency that insures bank deposits. Today’s average APY for a traditional savings account is 0.61%, Bankrate says.
APY, or annual percentage rate, reflects the actual return your account will earn during one year. It factors in compound interest, which is the interest that builds up on the interest in your account.
Savings Rates Today: High-Yield Savings Account
High-yield savings accounts typically pay substantially higher interest than a conventional savings account. But the thing to know is you’ll have to meet tough requirements set by the bank or credit union. Often, that means making a large deposit to open the account.
On high-yield accounts requiring a minimum deposit of $10,000, today’s best interest rate is 2.96%. That’s unchanged from one week ago.
The average APY for those accounts is now 0.17% APY, up from 0.14% a week ago.
The current average is 0.39% APY for a high-yield account with a $25,000 minimum deposit. That’s above last week’s 0.32%.
Savings Rates Today: Money Market Account (MMA)
Money market accounts are savings accounts that have some of the properties of checking accounts. Typically, you can write checks and take advantage of debit card privileges.
MMAs tend to pay marginally higher interest than a standard savings account. The FDIC says the average MMA rate is 0.18%, versus 0.17% for a traditional savings account.
But today, the best money market accounts have rates as high as 2.47%. That’s steady with the top rate of 2.47% from one week ago.
The average APY for an MMA is now 0.24%, up from 0.22% last week at this time, according to Bankrate.
How to Find a Savings Account
To find the best savings account for your needs, you first must answer the question: What exactly are you looking for?
An account where you can do your banking in person, at a branch? That would rule out online-only banks. An account that allows for easy withdrawals? That could rule out any account that limits your monthly transactions. An account that pays decent interest? That would rule out a traditional savings account at one of the big banks, because you’re likely to earn just 0.01% or 0.02% APY.
Don’t settle on any option until you’re certain you have a good grasp on the fees you’ll be charged. Savings accounts can ding you with monthly service fees, excess withdrawal fees and returned item fees (if you deposit checks that bounce), among others. Those charges add up and can gnaw away at your savings.
As you shop around, check reviews and ratings of financial institutions and make sure you choose one that will protect your money with federal insurance—from the FDIC or, in the case of credit unions, the NCUA.
More From Advisor
- Savings Account Rates Today: October 14, 2022—Rates Move Up
- Savings Account Rates Today: October 13, 2022—Rates Climb
- Savings Account Rates Today: October 12, 2022—Rates Are On The Move
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
