The Federal Reserve cut the federal funds rate three times in late 2024. As a result, interest rates on deposits are falling from their historic highs.
However, it is possible to find high-yield savings accounts that pay above 4% APY. So if you’re looking for the best prices available today, here’s an overview of where to find them.
Although interest rates on savings are elevated by historical standards, the national average rate for savings accounts is still just 0.42%, according to the FDIC. The good news: Top high-yield savings accounts offer more than 10 times the national average.
As of January 3, 2025, the highest savings rate offered by our partners is 4.75% APY. This rate is offered by Openbank and requires a minimum initial deposit of $500.
Here’s a look at some of the best savings rates available today from our trusted partners:
Remember, it’s important to shop early opening a savings account. Interest rates vary widely, but there are several banks (in particular, online banks) and credit unions with very competitive offers.
Related: 10 Best High Yield Savings Accounts>>
Online banks operate exclusively through the web. This significantly reduces their overhead costs, so they are able to pass these savings on to clients in the form of high deposit rates and low fees. In fact, many of the best high-yield savings accounts also come with zero monthly fees or minimum initial deposit requirements. If you are looking for the best interest rates on savings, online banks are a great place to start.
However, online banks aren’t the only place you can find savings accounts with rates ranging between 4% and 5% APY. Credit unions are non-profit financial cooperatives and are also known for providing competitive rates and lower fees. Many credit unions have certain requirements that must be met in order to become members, although there are some that allow almost anyone to join.
Read more: Here’s why online banks offer the highest interest rates on savings
Savings accounts are one of the safest places to put your money. They are insured by the FDIC (or NCUA in the case of credit unions), which means your deposits are protected up to $250,000 if your financial institution fails. They also cannot lose money due to market fluctuations.
However, a savings account is not always the right choice. While today’s interest rates on savings are high by historical standards, they still don’t offer the same returns you could get by investing your money in the market. For long-term savings goals like retirement, you should invest most of your savings in higher-risk (but higher-reward) market investments like stocks, index funds, and mutual funds to reach your goal.
But if you’re saving for a shorter-term goal like a down payment on a house, vacation or even emergency funda high yield savings account is one of the best options. This is especially true if you want to access your money as needed; other types of high-yield deposit accounts, including money market accounts and certificates of deposit (CDs), place greater limits on how often you can withdraw funds.
