What’s the Average Interest Rate for Savings Accounts?

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Banks use the money you deposit into your savings account to make loans to other banks. In return, the bank pays you interest on your account balance. The more interest you earn, the more your money grows, so it’s worth doing your homework to make sure you’re earning the highest rate possible.

What Is the Interest Rate on a Savings Account?

The average savings account interest rate is 0.24% APY, according to the FDIC, but many of the largest financial institutions in the U.S. pay rates as high as 3.85% APY.

GOBankingRates has identified 10 of the best savings account interest rates available right now, with rates from 0.61% to 3.85%.

Bank Account and APY
Ally Bank Online Savings Account – APY
American Express National Bank, Member FDIC High Yield Savings Account – APY
Axos Bank High Yield Savings – APY
Barclays Bank Online Savings – APY
CIT Bank Savings Connect – APY
Discover Bank Online Savings Account – APY
FNBO Direct Online Savings Account – APY
Marcus by Goldman Sachs, Member FDIC Online Savings Account – APY (Annual Percentage Yield) as of Dec. 12, 2022
Sallie Mae Bank SmartyPig – APY
Synchrony Bank High Yield Savings – APY
Vio Bank High Yield Online Savings Account – APY
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Historical Savings Account Interest Rates

Over the last 50 years, interest rates have ranged from a high of 20% to a low of 0.25%, where they were from April 2020 to February 2022. Although this was the lowest level since December 2008, rates remained essentially unchanged from then until December 2015, when they began to creep up slightly, reaching 2.00% – 2.50% in December 2018.

At the onset of the pandemic in the U.S., the Federal Reserve cut rates to stimulate the economy by encouraging Americans to borrow money. The more consumers borrow and ultimately spend, the more money they pump into the economy.

One potential drawback of injecting all that money into the economy is that it can spur inflation, where the price of consumer goods and services increases. The Fed can increase rates to keep inflation in check. In fact, it’s been doing exactly that, with six consecutive rate hikes in the past year. As of October 2022, the all items index surged 7.7% — before seasonal adjustment — according to the Bureau of Labor Statistics, so another rate increase is likely.

How To Find the Best Savings Account Rates

Despite the recent Fed rate hikes, most banks have been slow to raise their average savings account interest rate. However, a savings account can still be a good place to park an emergency fund you don’t need immediate access to, especially if you bank with a financial institute with above-average rates.

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Online banks often don’t pay for overhead costs like brick-and-mortar banks do, so they can pass those savings on to their customers. For example, American Express National Bank, Member FDIC, offers an online savings account with some of the highest interest rates — over 12x the average interest rate and more than 300 times the rates of some of the biggest banks in America.

Credit unions are another good option. They’re non-profit and member-owned, so paying competitive rates is a priority.

Wherever you bank, a high-yield savings account is often your best bet if you can meet the minimum balance requirement.

To get the best savings rate at a bank that meets all your needs, do your research. In addition to looking at interest rates, consider minimum opening deposit requirements and balance requirements as well as maintenance and other fees that can reduce the value of that higher rate.

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Are There Any Savings Accounts That Pay 5.00%?

While you’ll need to meet multiple requirements, Varo Bank allows you to earn up to APY on balances up to $5,000.

Now, which bank gives 7.00% interest on savings accounts? While this would be a great way to rack up interest, no banks currently offer this savings account rate.

Good To Know

Some banks offer relationship rewards to customers who have multiple linked accounts at the bank. For example, Bank of America, Member FDIC offers several reward tiers that boost its Advantage Savings account rates, when you maintain a qualifying minimum balance across eligible accounts. Other rewards include discounts on credit cards and loan interest rates.

Alternatives to Savings Accounts

With interest rates so low, even the best savings account probably won’t earn enough to stay ahead of inflation. Consider safe alternatives for cash you don’t expect to need any time soon.

Certificates of Deposit

CDs are a no-risk alternative to a checking account. Although you can’t touch the money during the term of the CD, you can choose from a range of terms to find the one that gives you the best return for the commitment you’re comfortable making. Depending on the bank, terms can be as short as a few months or as long as 10 years. Interest rates depend on the size of the CD and the length of the term, with larger CDs and longer terms usually paying better rates.

Ally Bank, for example, offers terms of three months to five years, with no minimum deposit. The five-year CD earns APY. While that won’t grow your nest egg by much, the rate is considerably higher than Ally’s current online savings rate.

Education Savings Plans

A 529 plan can help you save for your children’s education and enjoy tax benefits to boot. As long as you use the money for a qualified education expense, your contributions and withdrawals are tax free.

Retirement Accounts

Consider increasing your contributions to your individual retirement account or 401(k) — or opening a retirement account of you don’t already have one. A 401(k) can be especially lucrative if your employer matches your contributions.

Overall, the average savings account interest rate is admittedly low. However, if you’re willing to shop around, you can find a rate that’s monumentally higher. You might also decide an alternative to a savings account is best for you. Every situation is unique, so spend time conducting research to determine the right move for your money.

Gabrielle Olya and Jennifer Taylor contributed to the reporting for this article.

GOBankingRates is a personal finance and consumer interest rate website owned by ConsumerTrack, Inc., an online marketing company serving top-tier banks, credit unions, and other financial services organizations. Some companies mentioned in this article might be clients of ConsumerTrack, Inc., which serves more than 100 national, local and online financial institutions. Rankings and roundups are completely objective, and no institution, client or otherwise, paid for inclusion or specific placement. Any opinions, analyses, reviews or recommendations expressed in this article are those of the author alone and have not been reviewed, approved, or otherwise endorsed by the companies included in the article. All fees and rates are subject to change at the issuers’ discretion. Some interest rates might be short-term or promotional offers only, and it is possible additional terms and conditions must be met in order to obtain the interest rates listed. Rates and availability might vary by region. Verify terms and conditions before opening an account.

GOBankingRates bases its assessment of “best” and “top” products on the above-stated parameters to create a baseline for comparison. This assessment is an approximation of “best” and “top” designed to help consumers find products that might be appropriate for them. There could be other options available as well. Consumers should consider various options appropriate for their personal circumstances.

Editorial Note: This content is not provided by any entity covered in this article. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by any entity named in this article.

Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of Dec. 12, 2022. 

Editorial Note: This content is not provided by American Express. Any opinions, analyses, reviews, ratings or recommendations expressed in this article are those of the author alone and have not been reviewed, approved or otherwise endorsed by American Express. American Express credit card products are not available through GOBankingRates.com.

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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About the Author

Daria Uhlig is a personal finance, real estate and travel writer and editor with over 25 years of editorial experience. Her work has been featured on The Motley Fool, MSN, AOL, Yahoo! Finance, CNBC and USA Today. Daria studied journalism at the County College of Morris and earned a degree in communications at Centenary University, both in New Jersey.
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