Which banks currently offer 8% interest on savings accounts

No major national bank currently offers 8% interest on a standard savings account. The highest rates from large banks like Chase, Bank of America, and Wells Fargo typically range from 0.01% to 0.05% on savings accounts. Online banks and credit unions offer substantially higher rates—some reaching 4.5% to 5.35%—but 8% is not available through traditional deposit products at FDIC-insured banks.

If you have seen an offer claiming 8% on a savings account, it is likely either outdated information, a promotional rate that has expired, or a product that is not a standard savings account. Some money market accounts and certificates of deposit (CDs) from online banks have offered rates in the 5% range in recent years, but these are different products with different terms and withdrawal rules.

Interest rates change frequently based on Federal Reserve decisions and market conditions. A rate that was accurate six months ago may no longer be available. The only way to know what is currently offered is to check the bank's website directly or call their customer service line.

Key Takeaways

  • No FDIC-insured bank currently offers 8% on a standard savings account; the highest rates from online banks are around 5.35%.
  • If you see an 8% offer, verify the source and check whether it is a promotional rate, an outdated quote, or a different product like a CD or money market account.
  • Interest rates change based on Federal Reserve policy and market conditions, so rates that were available months ago may no longer be offered.
  • Online banks and credit unions typically offer higher rates than large national banks, but you should compare current rates directly from each institution's website.
  • Money market accounts and CDs may offer higher rates than savings accounts but come with different rules about withdrawals and minimum balances.

Why savings account rates are lower than 8%

Banks set savings account interest rates based on what the Federal Reserve charges them to borrow money. When the Fed's benchmark rate is high, banks can afford to pay depositors more. When it is low, they pay less. Over the past two years, the Fed has kept rates elevated, which is why online banks have been able to offer 4% to 5% rates. But 8% would require either a much higher Fed rate or a bank willing to lose money on deposits—neither of which happens in practice.

Savings accounts also carry lower rates than other products because they offer unlimited withdrawals. A CD, which locks your money away for a set term, can pay more because the bank knows exactly how long it will hold your funds. A money market account, which restricts withdrawals, can also pay more. A savings account, by contrast, must keep rates lower to account for the risk that you might withdraw your balance at any time.

Where to find the highest savings account rates today

Online banks consistently offer the highest savings account rates because they have lower overhead costs than brick-and-mortar branches. As of early 2024, online banks including Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Wealthfront have offered rates between 4.5% and 5.35%. These rates change frequently, sometimes weekly, so you should check each bank's website directly before opening an account.

Credit unions often offer competitive rates as well, sometimes matching or exceeding online banks. The rate depends on which credit union you join and whether you meet their membership requirements. You can search for credit unions in your area through the CO-OP Network or Allpoint to see what rates they currently offer.

Large national banks like Chase, Bank of America, and Wells Fargo offer rates well below 1% on savings accounts. If you already have a checking account at one of these banks, you may be tempted to keep your savings there for convenience, but moving your savings to an online bank or credit union could earn you significantly more interest on the same balance.

How to compare savings account rates across banks

When comparing rates, look at three things: the annual percentage yield (APY), any minimum balance requirement, and whether the rate is promotional or permanent. The APY is the actual return you will earn over a year, including compounding. A minimum balance requirement means you must keep a certain amount in the account to earn the advertised rate—if your balance drops below that, the rate may fall. A promotional rate is temporary and will drop after a set period, usually three to six months.

Visit each bank's website and look for the savings account product page. The APY should be clearly displayed. If it is not, call the bank's customer service line and ask for the current rate. Write down the rate, the minimum balance, and the date you checked, because rates change and you want to know when you gathered the information.

Do not rely on comparison websites alone, because they update slowly and may show outdated rates. Use them as a starting point to identify which banks to check, then go directly to each bank's website to confirm the current rate before opening an account.

What to watch for when comparing rates

Promotional rates are the most common trap. A bank might advertise 5.35% for the first three months, then drop to 0.50% after that. If you plan to keep your money in the account long-term, the promotional rate does not matter much—what matters is the rate after the promotion ends. Read the fine print or call the bank and ask what the rate will be after the promotional period.

Minimum balance requirements can also cost you money. If a bank requires a $25,000 minimum balance to earn the advertised rate, and you only have $10,000, you will earn a much lower rate. Some banks also charge monthly fees if your balance falls below the minimum, which eats into your interest earnings. Always ask whether there are fees and what the minimum balance requirement is.

FDIC insurance is important but often overlooked. All deposits at FDIC-insured banks are protected up to $250,000 per account holder per bank. If you have more than $250,000 to deposit, you should split it across multiple banks to keep all of it insured. Online banks are FDIC-insured just like traditional banks, so this protection applies to them as well.

Alternatives to savings accounts that may pay more

If you are looking for a higher return and can lock away your money for a set period, a certificate of deposit (CD) might pay more than a savings account. A one-year CD from an online bank might pay 5% or slightly higher, while a savings account at the same bank pays 5.35%. The trade-off is that you cannot withdraw the money without a penalty until the CD matures. If you need the money before the term ends, you will lose some or all of the interest you earned.

Money market accounts are a middle ground. They typically pay more than savings accounts but less than CDs, and they allow a limited number of withdrawals per month without penalty. Some money market accounts from online banks have paid 5% or higher in recent years. The downside is that the withdrawal limit (usually six per month) may not work for you if you need frequent access to your money.

High-yield savings accounts are simply savings accounts with higher interest rates, usually offered by online banks. They are not a different product—they are the same product with a better rate. The term "high-yield" just means the rate is higher than what traditional banks offer.

How interest rates on savings accounts change over time

The Federal Reserve sets a target range for the federal funds rate, which is the rate banks charge each other for overnight loans. Banks use this as a benchmark to set the rates they offer to depositors. When the Fed raises its rate, banks can afford to pay depositors more, so savings account rates go up. When the Fed lowers its rate, banks lower the rates they offer, so your earnings go down.

The Fed raised rates aggressively from March 2022 through July 2023 to fight inflation. This is why online banks were able to offer 5% and higher rates during that period. If the Fed lowers rates in the future, savings account rates will fall as well. You cannot predict when or by how much, but you should understand that the 5% rate you see today may not be available next year.

Some banks lower their rates even when the Fed does not raise them, because they have enough deposits and do not need to attract new customers. Other banks raise their rates to compete for deposits. This is why rates vary so much between banks even when the Fed rate is the same.

Frequently Asked Questions

Did any bank ever offer 8% on a savings account?

In the early 1980s, when inflation was very high, some banks offered savings account rates above 10%. But that was 40 years ago. In recent history, no major bank has offered 8% on a standard savings account. If you saw an 8% offer recently, it was either a promotional rate that has expired, a different product like a CD, or misinformation.

Is it safe to put my money in an online bank?

Yes, as long as the bank is FDIC-insured. Online banks like Marcus, Ally, and American Express Personal Savings are all FDIC-insured, which means your deposits are protected up to $250,000 if the bank fails. You should verify FDIC insurance on the bank's website or by calling them directly before opening an account.

What is the difference between APY and interest rate?

The interest rate is the percentage the bank pays on your balance. The APY (annual percentage yield) is the actual return you earn over a year, including the effect of compounding—when interest is added to your balance and then earns interest itself. APY is always equal to or higher than the stated interest rate. Banks are required to show you the APY, so use that number when comparing accounts.

Can I move my money between banks if rates change?

Yes. You can withdraw your money from one bank and deposit it in another at any time without penalty. There is no lock-in period for savings accounts. If a different bank offers a higher rate, you can move your balance there. The only products with penalties for early withdrawal are CDs and some money market accounts.

What happens to my interest if I withdraw money before the end of the month?

With most savings accounts, interest is calculated daily and added to your account monthly. If you withdraw money mid-month, you earn interest only on the balance you held during that period. You do not lose interest you already earned, but you earn less interest that month because your average balance was lower.