What Is the Average Savings Account Interest Rate in 2025?
Written by
Rudri Patel
Edited by
Elizabeth Constantineau
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The national average savings account rate is 0.38%, according to the FDIC. However, interest-bearing accounts can offer yields ranging from 0.01% to over 4.00%. Large national banks, like Bank of America and Wells Fargo, tend to offer the lowest rates, while online-only banks and credit unions typically provide the highest. Here’s what to know about the average savings account interest rate — and how to find a better return on your money.
Average Savings Account Interest Rates in July 2025
Here are the current national average savings rates, based on FDIC data, across common savings account options.
| Account Type | Average Annual Percentage Yield (APY) |
|---|---|
| Traditional savings accounts | 0.38% |
| Money market accounts | 0.59% |
| 1-year CD | 1.62% |
| 5-year CD | 1.33% |
How Much Interest Does a Standard Savings Account Give You?
A standard savings account typically earns around 0.38% APY — which doesn’t add up to much over time compared to high-yield options.
To show the difference, here’s how your balance would grow in a standard account versus a high-yield account at 4.00% APY. Both examples compound interest daily and start with a $1,000 deposit with no additional deposits.
| Year | 0.38% APY Account | 4.00% APY Account |
|---|---|---|
| Year 1 | $1,003.81 | $1,040.81 |
| Year 2 | $1,007.63 | $1,083.28 |
| Year 3 | $1,011.47 | $1,127.49 |
| Year 4 | $1,015.32 | $1,173.50 |
| Year 5 | $1,019.18 | $1,221.39 |
Keep In Mind
High-interest accounts can help grow your savings faster, giving you more momentum as you work toward your savings goals. Compounding interest also adds to this effect: as your balance grows, so does the amount of interest you earn each month, even if your APY doesn’t change.
Why Do Savings Account Interest Rates Vary?
The rate you earn on a savings account isn’t fixed — here’s what drives the differences.
- Federal Reserve shift: Rates may shift based on the federal funds rate, which is influenced by the Federal Reserve’s economic policy. When the federal funds rate goes down, financial institutions typically reduce APYs.
- Type of bank: Online banks tend to offer higher rates than traditional banks.
- Promotional strategy: Banks may offer an increase in rates to attract new customers.
- Account requirements: Some banks may offer higher rates if you meet certain conditions — like maintaining a minimum balance or making a minimum deposit when opening the account.
- Economic conditions: Rates may vary because of the rate of inflation and the general economic outlook.
How To Get the Best Savings Account Interest Rates
Earning the best savings account interest rate isn’t just luck — it comes down to knowing where and how to look.
- Compare online banks and their rates: Online banks tend to offer higher APYs compared to traditional banks. The APYs generally range from 4.00% to 5.00%, especially on the best high-yield savings accounts.
- Check for rate tiers: Some savings accounts offer a rate increase as your account balance increases.
- Watch for promotional offers: Banks offer promotions for higher interest rates on savings accounts throughout the year. You may also get a better rate as a new customer.
- Choose accounts where interest compounds: Be sure to check for accounts with daily or monthly compounding.
Where To Get the Best Interest Rates on Savings Accounts
These banks are leading the pack when it comes to the highest rates on deposit accounts — many of which are among the best high-yield savings accounts on the market right now.
| Bank | APY |
|---|---|
| Varo Bank | Up to |
| Ally Bank | |
| Barclays Bank | Up to |
| CIT Bank | Up to |
| Discover® Bank, Member FDIC | |
| Axos Bank | Up to |
| Marcus by Goldman Sachs | |
| Synchrony Bank |
Online Savings Accounts vs. Traditional Savings: Which Offers Better Rates?
Online-only banks often offer higher yields by cutting overhead costs, while traditional banks provide in-person support but usually lower rates. Here’s how the two compare in features, pros and cons.
| Category | Online Savings Accounts | Traditional Savings Accounts |
|---|---|---|
| Features | -Typically offer high rates -Managed online exclusively -Funds are FDIC insured |
-Offered by brick-and-mortar banks and credit unions -Can be paired with a checking account and ATM access -Come with deposit insurance — FDIC or NCUA |
| Pros | -Top-tier, competitive rates for those who like to save -Low to no monthly fees -24/7 access |
-Branch access and in-person support -Convenient if you already bank there -Easier to deposit cash and manage multiple accounts |
| Cons | -No in-person service -May take a few days to transfer funds to an external account -No access to cash deposits |
-Very low APYs -May have monthly maintenance fees -Interest growth is low over time |
Best High-Interest Alternatives to Savings Accounts
A high-yield savings account is a great tool, but it’s not the only way to grow your money. Diversifying into other interest-earning accounts can help you meet your long-term financial goals.
CD Accounts
Certificates of deposit (CDs) are a low-risk alternative that typically offer higher interest rates in exchange for locking in your funds. Terms can range from a few months to several years, and CD rates often increase with longer terms or larger deposits.
Money Market Accounts
Money market accounts (MMAs) combine the features of a savings account with check-writing abilities and debit cards for cash withdrawals. These account rates are often higher than traditional bank accounts.
Retirement Accounts
Consider increasing your contributions to your individual retirement account or 401(k) — or opening a retirement account if you don’t already have one. A 401(k) can be especially lucrative if your employer matches your contributions.
Savings Account Interest Rate FAQs
Curious about how savings account rates work and how to get the best return? These FAQs explain it all.- How often do savings interest rates change?
- Savings account rates can change at any time in response to the Federal Reserve rate.
- What is the average interest rate for a savings account?
- The average savings account interest rate is about 0.38% for a traditional savings account.
- High-yield savings account interest rates fall between 4.00% to 5.00% APY.
- Which bank gives 7% interest on savings accounts?
- Currently, there are no banks offering 7% interest on a savings account. Sometimes credit unions and banks offer promotional higher yields.
- Is a 5% savings account good?
- Yes, 5% is an excellent interest rate. This rate is well above the average rate.
- How much interest would $1,000 make in a savings account in one year?
- If your savings account earns 5% APY, you'd earn about $50 in one year with a simple interest calculation.
- How much interest does a standard savings account give you?
- Standard savings accounts offer little interest. Current average rates range from 0.01% to 0.10% APY.
Caitlyn Moorhead and Daria Uhlig contributed to the reporting for this article.
Rates are subject to change; unless otherwise noted, rates are updated periodically. All other information on accounts is accurate as of July 8, 2025.
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.
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- HelpWithMyBank.gov. "Who sets the interest rates on savings accounts?"
- U.S. News. "Best Savings Accounts in 2025 – January 2025."
- U.S. News. "Best Credit Unions in 2025 – January 2025."
- Forbright Bank. "How Banks Think About Rate"
- Investor.gov. "Compound Interest Calculator."
- Federal Reserve Bank of New York. "Effective Federal Funds Rate"
- The Wall Street Journal. "Money Rates."
- Consumer Financial Protection Bureau. "The Fed is raising interest rates. What does that mean for borrowers and savers?"
- FDIC. 2025. "National Rates and Rate Caps – June 2025."
