Saving money is an important habit and the foundation of a solid financial plan. However, where you put your savings is also important. Today’s savings interest rates vary widely, but some of the best accounts offer rates as low as 5% APY and even higher. Let’s take a look at the best savings interest rates today and where to find them.
What are the best savings rates today?
Historically, savings account interest rates have been high. That said, the rates on traditional savings accounts pale in comparison to those offered on high-yield savings accounts.
For example, the average savings account rate is only 0.45%, while the best savings interest rates are generally around 4.5% to 5% APY. As of July 17, 2024, the highest savings account rate offered by our partners is currently 5.50%.
Here’s a look at some of the best savings rates available today from our verified partners:
Connected: 10 Best High Yield Savings Accounts in 2024>>
Will savings interest rates drop soon?
Deposit account rates—including savings rates—are tied to the federal funds rate. This is the target interest rate set by the Federal Reserve; when you raise the target rate, deposit account rates usually go up. And conversely, when the Fed lowers its rate, deposit rates fall.
The Fed has maintained its current rate of 5.25%–5.50% since July 2023. However, as inflation cools, experts agree that the Fed will start cutting rates later this year, likely in November.
If the Fed lowers interest rates, it is very likely that savings interest rates will begin to decrease as well. This means now could be the last chance for savers to take advantage of today’s higher rates.
Read more: Bonds vs. High-Yield Savings Accounts: Which Is Better for Beating Inflation?
Is now a good time to put your money into a savings account?
Choosing where to put your money is an important decision, and there are several factors you should consider when evaluating your options. A high-yield savings account can make sense if you’re looking for a safe place to hold short-term savings while earning a solid return. Here are some key considerations:
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Interest rates: One of the most important features of a savings account is the interest rate. It’s important to shop around and compare the best deals to make sure your money will grow over time. Considering that savings rates are likely to fall in the near future, opening a high-yield savings account now will allow you to take advantage of historically high rates.
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Goals: Today’s high-yield savings accounts offer rates we haven’t seen in over a decade. That said, savings rates still don’t match average returns for the stock market. If you’re saving for a long-term goal like retirement, a savings account is probably not the best place to put your money, as your balance won’t grow at a rate that will allow you to reach your goal. However, if you’re saving for a financial emergency, a down payment on a house or car, gifts for the holiday season, or another short-term goal, a savings account is a great place to keep those funds.
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Accessibility: Certain types of accounts and investments can offer higher returns than a savings account, but can make it difficult to access your funds. For example, if you put your savings in a certificate of deposit (CD) and need to access the money before the maturity date, you may be subject to an early withdrawal penalty. So if you want to be able to dip into your savings as needed, a high-yield savings account is likely the best choice.
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Security: In most cases, savings accounts are insured by the FDIC up to the federal limit. They also cannot lose money due to market fluctuations, making them a low-risk option.
Read more: Can you negotiate a higher savings account rate with your bank?