What Is the Average Interest Rates of Deposit Accounts?

When it comes to finding the perfect account to stash your savings, the interest rate attached is a significant factor. After all, selecting a savings account with a high APY allows you to put your funds to work for you.

What Is The Average Interest Rate for Savings Accounts?

As of July 17, 2023, the FDIC reported that the average interest rate on savings accounts was 0.42% APY. That’s pretty low. In fact, it’s not enough to keep your savings on pace with inflation, which means your savings are losing purchasing power every day. In the same reporting period, the national rate cap was 5.83% APY.

As a saver, this means that you can find accounts offering an APY significantly over the average. But at the very least, you’ll want to make sure that your savings are tucked away in an account that offers an average interest rate.

Do Interest Rates Change Over Time?

Yes, interest rates are almost constantly changing. A few of the factors that have an impact on interest rates include:

  • Inflation: When the inflation rate is high, interest rates are likely to rise. In general, this is because lenders want enough compensation to match the decrease in purchasing power caused by inflation.
  • Government policies: The Federal Reserve sets the federal funds rate, which is the rate financial institutions charge each other for short-term loans. This baseline interest rate impacts other lending rates. Generally, monetary policy can have a big impact on interest rates.
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While other factors can impact interest rates, inflation and government policies tend to set the tone. If you’ve been paying attention to interest rates over the last few years, you’ve likely noticed the bumpy ride. Both inflation and government policies have contributed to the volatile interest rate environment we are living through.

Which Financial Institutions Offer the Best Interest Rates?

Every financial institution gets to set its own interest rates for various saving and lending products. But there are some general trends to notice when looking for the best interest rates on savings accounts.

Traditional banks with lots of brick-and-mortar locations tend to offer the lowest interest rates for savings accounts. Some of the interest rates offered on savings accounts through major financial institutions are 0.01% APY. While it’s possible to snag rates closer to 0.10% APY and higher through traditional banks, that’s like finding a needle in a haystack.

In contrast, online banks tend to offer the best interest rates on savings accounts. With a bit of research, you can find rates that exceed 5%.

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Good To Know

The difference in interest rates can be attributed to many factors. The most obvious factor is that traditional banks have a higher overhead attached to maintaining a network of brick-and-mortar locations.

With higher overhead, traditional banks don’t allocate resources to offering account holders a top-notch APY.

Since online banks don’t have as much overhead, they tend to pass on higher savings rates to their account holders.

How To Find the Top Interest Rates for Savings Accounts

Every saver has an interest in putting their funds in a top-notch savings account. In addition to looking for an account with minimal fees, a high APY is an attractive feature. If you are looking to make the most of your savings, consider comparison shopping with the following steps.

  • Decide on your needs: Some consumers prefer to use in-person banking features. But you’ll likely find the top savings account APYs through an online bank. If you are comfortable managing your savings online, then consider exploring these technology-based options.
  • Shop around: Take advantage of free resources that outline the top online savings accounts. You can quickly narrow in on an account with an attractive APY that suits your needs.
  • Check for fees: Before you move forward with opening the account, read the fine print. Make sure that you aren’t opening an account with surprising fees. Also, confirm that the balance you plan to start with qualifies for the interest rate you had in mind.

As you shop around, keep your needs and savings balance in mind. In some cases, banks offer higher APYs for account holders with a higher balance. But some banks provide the same APY to all balances. The key is to understand the rules of the account before opening it.

Final Take

Average interest rates tied to savings accounts and loan products change over time. While the market conditions are out of your control, you do have the power to shop around for the best interest rates. When it comes to a savings account, shopping around for the top interest rate could lead to a significant boost in your savings over time.

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Here are the answers to some of the most frequently asked questions regarding interest rates.
  • What is the average interest rate?
    • As of July 17, 2023, the average interest rate on savings accounts was 0.42% APY.
  • Is a 6% interest rate a lot?
    • When compared to the national average of 0.42% APY, a 6% interest rate is relatively high.
  • What is the current average interest rate in the U.S.?
    • The current average interest rate for savings accounts in the U.S. is 0.42% APY, according to the FDIC as of July 17, 2023.
  • Is a 5% interest rate bad?
    • No. A 5% interest rate on a savings account isn't bad. In fact, it's relatively high when compared to the national average interest rate of 0.42%.

Data is accurate as of Aug. 18, 2023, and is subject to change.

Our in-house research team and on-site financial experts work together to create content that’s accurate, impartial, and up to date. We fact-check every single statistic, quote and fact using trusted primary resources to make sure the information we provide is correct. You can learn more about GOBankingRates’ processes and standards in our editorial policy.


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