Savings Interest Rates Today, August 31, 2024 (best account offers 5.50% APY)

Current savings account interest rates are some of the highest we’ve seen in more than a decade due to multiple rate hikes by the Federal Reserve. Even so, savings interest rates vary widely from bank to bank, so it’s important to make sure you’re getting the best possible rate when shopping for a savings account. The following is a breakdown of today’s savings interest rates and where you can find the best deals.

Overview of savings interest rates today

The national average savings account rate is 0.46%, according to the FDIC. That may not seem like much, but consider that just two years ago, it was just 0.07%, reflecting a sharp increase in a short period of time.

This is largely due to the Fed’s monetary policy decisions, which began raising its benchmark rate in March 2022 to combat skyrocketing inflation. Since then, the Fed has raised interest rates 11 times, although it has put off further rate hikes until 2024. Experts believe the Fed will finally begin to lower its target rate in September, meaning that deposit account rates, including savings interest rates will probably begin to decline. .

Although the national average interest rate on savings is quite low compared to other types of accounts (such as CDs) and investments, the best savings rates on the market today are much higher. In fact, some of the top accounts currently offer more than 5% APY.

Poppy Bank, for example, currently offers the highest savings account rate at 5.50% APY for its Premier Online Savings Account. The minimum opening deposit is $1,000 and this rate is guaranteed for three months.

Betterment also offers an account with 5.50% APY. However, this is a cash management account for brokerage clients and not a traditional savings account. No minimum opening deposit required.

Since these rates may not be around much longer, consider opening a high-yield savings account now to take advantage of today’s high rates.

Here’s a look at some of the best savings rates available today from our verified partners:

Related: 10 Best High Yield Savings Accounts Today>>

How much interest can I earn with a savings account?

The amount of interest you can earn on a savings account depends on the annual percentage rate (APY). This is a measure of your total earnings after one year, taking into account your base interest rate and how often the interest is compounded (savings account interest is usually compounded daily).

Let’s say you put $1,000 into a savings account at an average interest rate of 0.45% compounded daily. At the end of a year, your balance will grow to $1,004.51 – the original $1,000 deposit, plus just $4.51 in interest.

Now let’s say you choose a high-yield savings account that offers 5% APY instead. In this case, your balance would increase to $1,051.27 over the same period, which includes $51.27 in interest.

The more you put into a savings account, the more you earn. If we take the same high-yield savings account example at 5% APY, but deposit $10,000, your total balance after one year would be $10,512.67, meaning you’d earn $512.67 in interest. ​

Read more: What is a good interest rate for your savings account?