Local banks and credit unions have garnered much attention from the media and consumers recently. With the emergence of the Occupy Wall Street and Bank Transfer Day movements, along with a generally heightened awareness among customers, community financial institutions have become synonymous with high quality banking.
So for depositors on the hunt for the best interest rates on savings accounts, their first stop is likely the local bank or credit union in town. However, though local institutions have the best savings account rates in general, rates can vary widely by institution and locating the best offers is often challenging.
In this study, state residents can find out how the savings opportunities in their communities compare to the rest of the nation. Does your state have the highest savings account rates, or does it fall near the back of the pack? Most importantly, what does that mean for you?
Average Savings Account Rates in Each U.S. State
Go Banking Rates calculated the average savings account rate in every state, based on its database of savings account rates from over 4,000 financial institutions. See individual state averages below, and continue to view state-by-state rankings.
|State||Average Rate||State||Average Rate|
|North Dakota||0.28||South Carolina||0.20|
|New Jersey||0.25||New Hampshire||0.17|
State Rankings: Average Savings Account Rate
To the left, each state, as well as the District of Columbia, is ranked from highest average savings account rate to lowest. Oklahoma ranks as number one with an average savings account rate of .34% APY offered by banks and credit unions in the state, while Arizona comes in last at just .12% APY.
Why Rankings Matter
The interest rate spread on these state averages is a mere .22%, small enough that most would consider these rankings to be less than noteworthy. Indeed, savings account rates across the U.S. are quite low, and only a small number of financial institutions offer savings account rates high enough to make a significant impact on savers’ earnings.
However, because community institutions usually serve a specific locale only (as opposed to national banks with nationwide branches), often turning away new business from too far outside of their target demographics, residents of low-ranking states may find there are fewer or perhaps no high-yield savings opportunities available within their communities.
In Arizona, for example, the highest savings account rate available in the entire state is just .40% APY. In this case, those who are most concerned with increasing their return on savings may need to turn to online accounts, where savings interest rates of around 1% are still widely available.
On the other hand, high-ranking states are indicative of better and more plentiful savings opportunities. Members of Rutherford Postal District Employees Federal Credit Union, located in the #13 state of New Jersey, for example, may take advantage of the best savings account rate in the nation at an impressive 2.52% APY (if they qualify for membership, or course).
The overall savings rate climate within a state will dictate residents’ savings strategies — whether funds will remain local, or if depositors will have to turn to alternatives like online banks or even market securities to get their hands on higher returns.
About This Study
Interest rates used to compile this study are from the Go Banking Rates interest rate database, which includes more than 4,000 online, national and local U.S. banks and credit unions. State rankings and averages are based on banks and credit unions serving a specifically local demographic only. Interest rates belonging to online banks and national banks with local branches were not considered.
Interest rates are accurate as of January 1, 2013, based on institutions’ published online rates and assuming a $10,000 deposit. Please note that rates fluctuate and individual rates included in this study may have changed since this date. Please verify interest rates with individual institutions prior to account opening.