Current savings account rates vary by bank and account type, but most traditional banks pay between 0.01% and 0.50% APY
The rate your bank pays depends almost entirely on the bank itself, not on you. A large national bank like Chase or Bank of America typically pays around 0.01% to 0.05% APY on a standard savings account. Online banks and credit unions often pay significantly more—some offer 4.00% to 5.35% APY on high-yield savings accounts. The difference between 0.01% and 5.00% on a $10,000 balance is roughly $500 per year, so the bank you choose matters far more than the account type.
Rates also shift when the Federal Reserve changes its benchmark interest rate. When the Fed raises rates, banks gradually raise what they pay depositors. When the Fed cuts rates, banks cut their rates faster than they raised them. This means the "current" rate you see today may be different in three months.
Money market accounts and certificates of deposit (CDs) often pay more than savings accounts at the same bank, but they come with trade-offs: money market accounts may limit how many withdrawals you can make per month, and CDs lock your money away for a set term (three months to five years) with a penalty if you withdraw early.
Key Takeaways
- Online banks and credit unions typically pay 10 to 100 times more than traditional brick-and-mortar banks on savings accounts.
- The rate you receive depends on which bank you choose, not on how much money you deposit or how long you've been a customer.
- Rates change when the Federal Reserve adjusts its benchmark rate, usually with a lag of a few weeks to a few months.
- Money market accounts and CDs at the same bank often pay more than savings accounts but come with withdrawal limits or early-withdrawal penalties.
- Moving your savings to a higher-paying account can earn you hundreds of dollars per year on the same balance.
Why rates differ so much between banks
A bank's savings rate reflects its cost of doing business and its need for deposits. Online banks have lower overhead—no physical branches, fewer employees—so they can afford to pay more to attract deposits. Traditional banks with thousands of branches have higher costs and often rely on customer inertia; many people keep their savings where they have a checking account, even if the rate is poor.
Credit unions are member-owned cooperatives, not profit-driven corporations, so they often return earnings to members through higher rates. However, credit unions have membership requirements—you may need to live in a certain area, work for a specific employer, or belong to an organization to join.
Banks also adjust rates based on how much deposit money they need. During periods when banks have plenty of deposits, they lower rates. When deposits are scarce, they raise rates to attract more. This is why you may see a bank's rate drop a few months after the Fed cuts its benchmark rate—the bank no longer needs to pay as much to keep deposits flowing in.
How to find the current rate at your bank
Your bank publishes its rates on its website, usually under "Savings Accounts" or "Rates & APY." The rate shown is the APY (annual percentage yield), which includes the effect of compounding. This is the number to compare across banks.
If you bank online, log in and look for a rates page or call the customer service number on your statement. If you bank at a physical branch, ask a teller or visit the website. Rates are public information and do not vary by customer—everyone at Chase gets the same rate on a Chase savings account.
Be cautious of promotional rates. Some banks offer a higher rate for the first three or six months, then drop it to a much lower rate. Read the terms carefully to see when the promotional period ends and what the standard rate will be.
The difference between savings accounts, money market accounts, and CDs
| Account Type | Typical Rate Range | Access to Money | Main Trade-off |
|---|---|---|---|
| Savings Account | 0.01% to 5.35% | Withdraw anytime | Lower rates at traditional banks |
| Money Market Account | 0.05% to 5.50% | Limited withdrawals per month | Restrictions on how often you can withdraw |
| Certificate of Deposit (CD) | 0.05% to 5.75% | Locked until maturity date | Early withdrawal penalty; money tied up |
A savings account lets you deposit and withdraw money whenever you want with no penalty. You earn interest on your balance, but the rate is usually the lowest of the three options.
A money market account combines features of savings and checking accounts. It typically pays a higher rate than a savings account but limits you to a certain number of withdrawals per month (often six). Some money market accounts come with a debit card or checkbook, making them feel more like checking accounts.
A certificate of deposit is a contract: you agree to leave your money in the account for a set period (three months, one year, five years, etc.) in exchange for a may provide rate. If you withdraw before the maturity date, you pay a penalty, usually a few months' worth of interest. CDs pay the highest rates because the bank knows exactly how long it will have your money.
How Federal Reserve rate changes affect what you earn
The Federal Reserve sets a benchmark interest rate (the federal funds rate) that influences rates throughout the economy. When the Fed raises its rate, banks eventually raise the rates they pay on savings. When the Fed cuts its rate, banks cut their rates—often faster than they raised them.
The lag between a Fed rate change and a bank rate change is usually two to eight weeks, but it varies. Some online banks adjust rates within days; some traditional banks take months. This means if the Fed cuts rates, your savings rate may drop before you notice, but if the Fed raises rates, your bank may take weeks to pass the increase along.
If you are saving money for a goal more than a year away, locking in a CD rate when rates are high protects you from future rate cuts. If you think rates will rise, keeping money in a flexible savings account lets you move it to a higher-paying account later.
Comparing rates across banks
To compare savings rates, visit the websites of banks you are considering and note their APY for a standard savings account. Write down the rate, the bank name, and the date you checked, because rates change. Compare at least three banks—a traditional bank where you might already have an account, one online bank, and one credit union if you are a member.
Do not choose a bank based on rate alone. Consider whether you need to make frequent withdrawals, whether you want access to a physical branch, and whether the bank has good customer service. A rate that is 0.5% higher is worth switching for if you have $50,000 saved, but it may not be worth the hassle if you have $2,000.
Also check whether the bank is FDIC-insured (for banks) or NCUA-insured (for credit unions). This insurance protects your deposits up to $250,000 if the bank fails. All legitimate banks and credit unions carry this insurance.
What happens to your rate if you switch banks
When you open a new savings account at a different bank, you start earning whatever rate that bank is currently paying. There is no waiting period or penalty. You can move your money from your old bank to your new bank by setting up an external transfer (usually free and takes one to three business days) or by withdrawing cash and depositing it yourself.
Your old bank will not penalize you for closing your account. You simply withdraw your balance and close the account. The interest you earned up to the day you withdraw is yours to keep.
If you have a CD, you cannot move it to another bank without paying an early withdrawal penalty. However, when your CD matures, you can move the money to a higher-paying account at a different bank with no penalty.
Frequently Asked Questions
Will my savings account rate go up if I deposit more money?
No. The rate is set by the bank and applies to all customers with that account type. Depositing more money earns you more interest (because you have a larger balance), but it does not change your APY. A $100,000 balance and a $1,000 balance at the same bank earn the same percentage rate.
What is the highest savings rate I can find right now?
Rates change daily and vary by bank. As of recent months, some online banks and credit unions have offered rates between 4.50% and 5.35% APY on savings accounts. Check current rates on bank websites directly, as rates published in articles can become outdated within weeks.
Is it worth moving my money to a higher-paying bank?
It depends on your balance and how much the rate difference is. If you have $50,000 and can move from 0.05% to 4.50%, you earn roughly $2,200 more per year. If you have $2,000, the difference is about $90 per year. Decide whether that amount is worth the time to open a new account and transfer your money.
Can a bank lower my rate without warning?
Yes. Banks can change rates at any time without notifying you in advance. However, they must notify you before the change takes effect. Check your email and account statements regularly, or set a reminder to review your rate every few months.
What happens to my interest if the bank fails?
Your deposits are protected up to $250,000 per account type at FDIC-insured banks and NCUA-insured credit unions. If the bank fails, the FDIC or NCUA takes over and ensures you get your money back, including any interest earned up to the failure date. You do not lose your savings.