Savings Interest Rates Today
Interest rates on savings accounts are on a downward trend after the Federal Reserve's rate cuts in late 2024. However, there are still opportunities to secure competitive rates.
Current Savings Interest Rates
The national average savings account rate is approximately 0.41% APY. However, rates from reputable partners can reach up to 4.75% APY. Openbank offers the highest rate, with a minimum opening deposit of $500.
High-Yield Savings Accounts
Consider opening a high-yield savings account to take advantage of current high rates. Interest earnings are calculated based on the annual percentage yield (APY), which reflects the base interest rate and compounding frequency.
For example, with a $1,000 deposit at 0.42% APY (daily compounding), the balance would grow to $1,004.11 after one year, yielding $4.11 in interest.
In contrast, a high-yield savings account at 4% APY would yield $40.81 in interest on the same deposit, resulting in a balance of $1,040.81.
Higher deposit amounts yield greater interest earnings. For instance, a $10,000 deposit in a high-yield savings account at 4% APY would yield $408.08 in interest after one year, resulting in a balance of $10,408.08.
Is it a Good Time to Open a Savings Account?
Given the declining interest rates, it's advisable to consider opening a high-yield savings account now to lock in competitive rates.