3.35% APY is competitive but not the highest rate available
Whether 3.35% APY is good depends on what other banks are offering at the moment you're comparing. As of late 2024, online banks and credit unions regularly offer rates between 4.0% and 5.35%, so 3.35% falls below the current market leaders. However, it beats the national average for traditional brick-and-mortar banks, which typically sit around 0.01% to 0.5%.
The rate you see today will not be the rate you see in six months. Banks adjust APY based on what the Federal Reserve does with interest rates. When the Fed raises its benchmark rate, banks tend to raise savings rates. When the Fed cuts rates, banks cut their rates too—sometimes within days. A 3.35% rate that's competitive today might be outdated in three months.
The real question is whether 3.35% is good for you—which depends on where your money is now, how long you plan to keep it there, and what you're trying to accomplish.
Key Takeaways
- 3.35% APY is above the national average for traditional banks but below the rates offered by most online banks and credit unions right now.
- Rates change frequently based on Federal Reserve decisions, so a rate that's competitive today may not be in a few months.
- If your current account earns less than 1%, moving to 3.35% will meaningfully increase the money you earn on your balance.
- High-yield savings accounts and money market accounts at online banks often offer 4.5% to 5.35% APY with the same FDIC protection as traditional banks.
- The difference between 3.35% and a higher rate compounds over time—on $10,000, the gap between 3.35% and 5.0% adds up to roughly $165 per year.
How much more money you'll earn at 3.35% versus your current rate
The easiest way to decide is to calculate what you're earning now and what you'd earn at 3.35%. If your current savings account earns 0.01%, the jump to 3.35% is substantial. On a $10,000 balance, you'd earn roughly $1 per year at 0.01% and roughly $335 per year at 3.35%—a difference of $334.
If you already have money in a high-yield account earning 4.5%, moving to 3.35% would cost you roughly $115 per year on that same $10,000. That's money you'd be giving up, so 3.35% would not be an upgrade.
The math gets more interesting with larger balances. On $50,000, the difference between 3.35% and 4.5% is roughly $575 per year. On $100,000, it's roughly $1,150 per year. These are real dollars that compound—money you earn in year one earns interest in year two.
Where 3.35% ranks among common account types
| Account Type | Typical APY Range | How 3.35% Compares |
|---|---|---|
| Traditional bank savings | 0.01% to 0.5% | Much higher |
| Online bank savings | 4.0% to 5.35% | Below average |
| Credit union savings | 3.5% to 5.0% | At or slightly below average |
| Money market account | 4.0% to 5.25% | Below average |
| Certificates of deposit (CDs) | 4.0% to 5.5% (varies by term) | Below average |
The rates in this table shift constantly. What matters is that 3.35% sits in the middle-to-lower range of what's available right now. If you're comparing it to a traditional bank, it's a clear win. If you're comparing it to online banks or credit unions, you can likely do better.
Why the bank offering 3.35% might still be worth it
A lower rate doesn't always mean a worse account. Some reasons to choose 3.35% despite higher rates elsewhere: you already bank there and moving is friction you don't want, the account has no monthly fees while competitors do, you get a sign-up bonus that makes up the rate difference, or you value in-person branch access and customer service.
If you have $5,000 in the account and you'd earn an extra $50 per year at 4.5% instead of 3.35%, but switching banks costs you two hours of your time and the new bank has no local branches, the math might not be worth it to you. That's a personal call.
However, if you have $50,000 or more sitting in a 3.35% account while online banks offer 5.0%, you're leaving real money on the table—roughly $825 per year. At that balance, the effort to switch usually makes financial sense.
What happens to your rate if the Federal Reserve changes course
The Federal Reserve controls a benchmark interest rate that influences what banks pay on savings. When the Fed raises its rate, banks usually raise savings rates within weeks. When the Fed cuts its rate, banks cut savings rates too—sometimes faster than they raised them.
If you lock in 3.35% today and the Fed cuts rates in the coming months, your 3.35% will look better relative to what new accounts offer. If the Fed raises rates, your 3.35% will look worse. Most savings accounts have no rate lock—your rate can change at any time, and the bank will notify you before it does.
The one exception is a certificate of deposit (CD), which locks in a rate for a set term—usually three months to five years. If you believe rates will fall, locking in 3.35% in a CD might make sense. If you think rates will rise, keeping your money in a flexible savings account lets you move it to a higher rate later.
How to find out what other banks are offering right now
The best way to know if 3.35% is good is to see what's available. Check the websites of online banks like Marcus, Ally, American Express Personal Savings, and Discover. Check your local credit union. Check what your current bank offers on its high-yield savings product. Write down the rates and the terms—some accounts require a minimum balance, some charge monthly fees, some limit how many withdrawals you can make per month.
Once you have three to five options, compare the rate, the fees, the minimum balance, and whether FDIC insurance covers your deposit (it should, up to $250,000 per account). The highest rate is not always the best account if it comes with fees or restrictions that don't fit your situation.
Rates change weekly, sometimes daily. A rate you see today might be different when you actually open the account. That's normal. What matters is the direction—if most banks are offering 4.5% to 5.0%, then 3.35% is below market. If most banks are offering 2.0% to 3.0%, then 3.35% is above market.
When 3.35% is actually the right choice
3.35% makes sense if: you're moving money from a traditional bank earning 0.01%, you value the bank's customer service or branch network enough to accept a lower rate, you're opening a CD and believe rates will fall soon, or you already have the account and switching costs more in time and hassle than the rate difference is worth over the next year.
3.35% does not make sense if: you have a large balance ($25,000 or more) and online banks are offering 4.5% or higher, you're opening a new account and have no loyalty to the bank, or you plan to keep the money there for several years and want to maximize what you earn.
Frequently Asked Questions
Will my 3.35% rate stay the same forever?
No. Banks can change savings rates at any time. Most savings accounts have no rate lock, so your rate can go up or down based on what the bank decides. The bank will notify you before the change takes effect. CDs are different—they lock in a rate for the full term.
Is 3.35% better than keeping money in a checking account?
Yes. Most checking accounts earn 0% or close to it. A savings account at 3.35% will earn you money on your balance. The tradeoff is that savings accounts usually limit how many times per month you can withdraw without a fee, while checking accounts don't.
Should I move my money from a 2.5% account to a 3.35% account?
If you have $10,000 or more, yes—the extra 0.85% adds up to roughly $85 per year on that balance. If you have less than $5,000, the difference is small enough that it might not be worth the effort to move. Check whether the new bank charges a fee to open the account or requires a minimum balance.
What if I need the money in three months?
3.35% in a savings account still makes sense because you can withdraw whenever you want. A CD would lock your money up for longer and might charge a penalty if you withdraw early. Stick with a flexible savings account if you might need the cash soon.
How much would I earn on $50,000 at 3.35% APY?
Roughly $1,675 per year, assuming the rate stays the same and you don't add or withdraw money. That's $1,675 divided into twelve monthly deposits of roughly $140. The actual amount varies slightly depending on how the bank calculates daily interest.