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- Banks and credit unions offer different interest rates on savings accounts.
- Online banks and credit unions tend to offer the most competitive interest rates.
- Interest rates fluctuate for both traditional and high-yield savings accounts.
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The type of savings account you have has a big impact on your interest rate, and switching your savings from a traditional savings account to a high-yield savings account could help your money grow much quicker.
Here's what you should know about savings interest rates.
Traditional savings account interest rates
The average savings account in the US has an interest rate of 0.17% APY, according to data from the FDIC.
Many banks offer savings accounts, but these traditional savings accounts earn fairly low interest rates.
Today's savings account rates
Here are some of the savings account interest rates offered on all balance tiers for the most basic accounts at major banks:
With these low interest rates, it's hard
to make money grow, whether its 0.01% APY or 0.05% APY. But, you don't have to settle for such low interest rates.
High-yield savings account interest rates
A high-yield savings account could help you grow your money quicker and make your money work harder, without any cost or inconvenience to you. The following are all high-yield savings accounts:
Earning more interest is as easy as opening a different savings account. Move your savings from a traditional account to a high-yield savings account and you'll start earning more. High-yield savings accounts earn multiple times more than a traditional savings account.
We're not talking investment returns, here — more like 1.80% APY to 3.01% APY. That's along the lines of the rates you'd see with some CDs, but with the flexibility to access your money when you need it. And, it's still significantly higher than the 0.17% APY average.
Most high-yield savings accounts are available through online-only banks. Though they're newer, you may already be familiar with several of the online banking services that offer these accounts, including Ally, Bask Bank, and Marcus by Goldman Sachs.
Online banks don't have the overhead that brick-and-mortar banks do, allowing them to pass on more money in interest. Based on the account interest rates above, it's easy to tell just how wide the gap is between the interest offered by a traditional savings account and an online, high-yield savings account.
Savings account interest rates by balance
Overall, there's no difference between average interest rates for a balance under $100,000 and a balance over $100,000 — both have an average of 0.17% APY, according to FDIC data.
There are a few banks that reward customers with a larger balance. But, there are quite a few that offer the same interest rates no matter the balance.
The balance you keep in your savings account could sway your interest rate. But at many banks, it won't make much difference. The bank you choose makes more of an impact than the amount you keep.
Savings account interest rates change often
It's worth noting that interest rates change often for both traditional and high-yield savings accounts. Banks move interest rates in step with the federal funds rate — the amount the Federal Reserve charges banks to borrow money. When the federal funds rate goes down, interest rates do as well, and vice versa.
As the Fed has raised interest rates in the first half of 2022, savings interest rates have slowly been going up, too. Even if they were to drop, however, it's best practice to keep saving. That way, when rates inevitably do go back up, you'll be earning interest on a larger amount of principal.
Liz Knueven
Personal Finance Reporter
Liz was a reporter at Insider, primarily covering personal-finance topics. Before joining Insider, she wrote about financial and automotive topics as a freelancer for brands like LendingTree and Credit Karma. She earned her bachelor's degree in writing from The Savannah College of Art and Design. She lives and works in Cincinnati, Ohio. Find her on Twitter at @lizknueven.
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When shopping around for the savings accounts for you, it’s important to know what you want from it. It’s also important to learn how your options stack up against the competition. For instance, are you currently earning below the average savings account interest rate? You might be surprised at what kinds of rates are available out there, especially at newer, online-centric banks. If you have questions about how your savings account fits into your overall financial plan, consider working with a financial advisor.
Average Interest Rate for Savings Accounts
According to the FDIC, the national average interest rate on savings accounts stands at 0.13% APY (as of Aug. 15, 2022). This applies to both average and jumbo deposits, which are accounts with a balance over $100,000.
While it was once easy to find a savings account at your local bank offering rates upwards of 3%, rates dropped precipitously following the Great Recession. In fact, in 2009, the national rate fell to approximately 0.22% for average savings deposits.
This decline in rates is thanks in large part to the Federal Reserve lowering rates in December of 2008 and holding them steady until 2015. The Fed made four rate hikes in 2018, which helped boost savings account APYs. However, they dropped three times in 2019. Then came the 2020 COVID-19 pandemic, which caused another major drop in rates.
You’ll typically find the lowest interest rates at brick-and-mortar banks. Big banks often offer something close to a 0.01% APY on their most basic savings accounts. There is sometimes an opportunity to earn at a better rate on higher balances, but even this higher tier rarely goes beyond 0.10% APY.
If you’re looking for the best rates in the industry, you’ll have much better luck with savings accounts at online banks. Interest rates in this category get bumped up quite a bit over their traditional counterparts. These high rates are often accessible to customers regardless of balance tier. Some of the best online savings accounts are at Ally Bank, Marcus by Goldman Sachs and Synchrony.
| Overview of Online Savings Accounts | ||
| Bank Account | Minimum Balance for Rate | APY |
| TAB Bank High-Yield Savings | $1 | 2.16% |
| Chime Savings | $0 | 1.50% |
| Citizens Access Online Savings Account | $5,000 | 2.10% |
| Ally Bank Online Savings Account | $0 | 2.00% |
| Marcus by Goldman Sachs High-Yield Savings | $0 | 1.90% |
| Synchrony High-Yield Savings | $0 | 2.05% |
Average Interest Rates for Linked Checking-Savings Accounts
Often, savings accounts can earn higher rates if you link it with a checking account from the same bank. Some banks may even offer a separate savings account, with a higher rate, that requires a linked checking account. This is typically the case with big banks that can’t offer the most competitive rates overall.
For example, the Chase Premier Savings account normally earns 0.01% APY. However, if you link either a Chase Premier Plus Checking or Chase Premier Platinum Checking account, you can earn at slightly higher rates. Your linked checking account must also have at least five customer initiated transactions per statement period.
| Checking-Savings Account APYs | |||
| Bank Account | Standard APY | Minimum Balance for Relationship Rate | Relationship APY |
| Chase Premier Savings | 0.01% | $0 $50,000 $100,000 $250,000 | 0.02% 0.03% 0.04% 0.05% |
| Bank of America Advantage Savings | 0.01% | $50,000 | 0.02% |
| PNC Standard Savings | 0.01% | $1 $2,500 | 0.02% 0.03% |
Bottom Line
The average interest rate on a savings account is very low – low enough that your savings won’t keep pace with inflation. However, you can beat the average and find the best savings account rates by opening an online savings account. If having in-person access to your accounts is important to you, then you can still check out accounts at traditional banks. Just understand that these banks will likely offer the lowest rates on their savings accounts. These rates will be below the national average, and well below what you could earn at an online bank.
Tips on Finding the Right Bank
- Your financial plan should include more than just a savings account. A financial advisor can help with this. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Both traditional and online banks offer a wide range of options for deposit accounts, with various savings, checking and money market accounts available. Some accounts may earn below the average rate while still offering some handy savings perks. It’s up to you to decide which features benefit you most.
- If you’re disappointed by the low-earning accounts at brick-and-mortar banks, consider whether you’d be comfortable with an online bank. You won’t have access to physical branches, but you’ll typically still have access to ATMs and mobile apps. Online banks are more likely to offer the highest rates to boost your savings.
Photo credit: ©iStock.com/andresr, ©iStock.com/MStudioImages, ©iStock.com/lovelyday12
Lauren Perez, CEPF® Lauren Perez writes on a variety of personal finance topics for SmartAsset, with a special expertise in savings, banking and credit cards. She is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. Lauren has a degree in English from the University of Rochester where she focused on Language, Media and Communications. She is originally from Los Angeles. While prone to the occasional shopping spree, Lauren has been aware of the importance of money management and savings since she was young. Lauren loves being able to make credit card and retirement account recommendations to friends and family based on the hours of research she completes at SmartAsset.
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