Savings account interest rates today, November 14, 2024; you can still get a rate above 5%

Current savings rates: Earn up to 5.25%

Take a look at the high-yield savings account interest rates available now:

For perspective, the present national average savings rate is 0.45%.

How the Federal Reserve shapes savings rates

Fed’s interest rate decisions significantly influence savings account rates. When the Fed increases its benchmark rate, banks typically respond by raising the interest offered on savings accounts to maintain competitiveness. Conversely, when the Fed lowers rates, savings account yields tend to decrease.

However, this relationship isn’t always straightforward. Banks may adjust their rates based on a range of factors, including their own financial strategies, efforts to attract new customers, and overall market conditions.

Frequency of rate adjustments

Savings account rates can be modified at any time, often without prior notice. Changes frequently occur following Fed meetings, which are held approximately eight times per year. Some banks, however, may adjust rates more often depending on their competitive positioning or in response to unexpected market developments.

Outlook for savings rates

It’s anticipated that savings account rates will decrease in the coming months. The Fed implemented a 25 basis point rate cut at its meeting on November 7th, after cutting it by 50 basis points on September 18. Currently the Fed rate stands at 4.50-4.75%, and the Fed has hinted at further cuts in the future. As a result, numerous banks have already begun reducing their savings account annual percentage yields (APYs).

Federal Deposit Insurance Corp. (FDIC) average national deposit rates: January 2020 to September 2024

High-yield vs. traditional savings accounts

The primary distinction between high-yield and traditional savings accounts is the interest rate offered. High-yield accounts typically provide rates that are 10 to 20 times higher than their traditional counterparts. For instance, while the national average savings rate stands at 0.45%, many high-yield accounts offer rates exceeding 4%.

Traditional accounts often provide physical branch access but with lower rates while high-yield accounts are typically offered by online banks, featuring higher rates but limited in-person services.

Advantages of high-yield savings accounts

Consider opening a high-yield savings account for these benefits:

• Significantly higher interest rates compared to traditional savings accounts
• Often free from minimum balance requirements or monthly fees
• Easy access to your funds
• Ideal for emergency funds or short-term savings goals
• FDIC-insured, providing the same protection as traditional banks

Comparing savings account options

When evaluating savings accounts, consider these key factors:

• Interest rates: Seek competitive APYs to maximize your earnings.
• Minimum balance requirements: Many high-yield accounts have no minimums.
• Fee structure: Avoid accounts with monthly maintenance fees.
• Fund accessibility: Ensure easy withdrawals or transfers when needed.
• Security: Verify FDIC insurance coverage.

Alternative savings vehicles

Beyond savings accounts, consider these options for growing your money:

Key takeaways

Despite the Fed’s recent rate cuts, high-yield savings accounts continue to offer competitive rates. While rates may decline in the near future, these accounts still provide significantly higher returns than traditional savings accounts.

To optimize your savings, consider opening a high-yield account with a competitive rate and favorable terms. Compare rates across different institutions regularly to ensure you’re getting the best possible return on your money.

Frequently asked questions