What is The Typical Savings Account Interest Rate?

The average savings account rate serves as a benchmark for the general interest-rate environment, but you shouldn’t settle for it.

Instead, aim for an annual percentage yield (APY) significantly higher than the national average, such as those offered by high-yield savings accounts. Many high-yield savings accounts provide competitive returns with little to no minimum balance requirements, making them an excellent option for maximizing your savings.

National average savings account interest rates

As of May 23, 2024, the national average yield for savings accounts is 0.58 percent APY, according to Bankrate’s latest survey of institutions. However, many online banks offer savings interest rates that exceed this average. The higher the rate, the more interest you’ll earn on your savings.

How Bankrate calculates the national average

In June 2023, Bankrate updated its methodology for determining the national average savings account rates. The national averages are generated from a weekly survey of more than 500 banks and credit unions. This survey includes institutions that are widely accessible and offer high yields, along with some of the largest banks in the country.

APY comparison

Interest rates for linked checking and savings

One strategy to earn a higher yield on your savings is by linking your savings account with a checking account, a feature commonly known as relationship rates. This offering is more prevalent among brick-and-mortar banks.

For instance, at Huntington Bank, customers who pair a savings account with a Huntington Perks Checking or Huntington Platinum Perks Checking account can enjoy a higher APY:

• Standard savings account yield: 0.01% APY
• Savings account yield when linked with a Huntington Perks Checking or Huntington Platinum Perks Checking account: 0.02% APY

However, it’s important to note that the Huntington Platinum Perks Checking account requires a total relationship balance of $25,000 to avoid a $25 monthly maintenance fee.

Despite these options, the combination of high balance requirements and lower APYs from brick-and-mortar banks often leads individuals to consider online banks for better returns. Online banks typically offer higher savings account interest rates, including a higher APY across all balances, although some may require a minimum balance to qualify. The majority of online banks have minimum opening requirements of $100 or less.

In Conclusion

When hunting for a high-yield account, consider comparing online banks with larger banks. Typically, online banks offer lower minimum balances, no monthly fees, and may provide the same APY on all balances. In many instances, the savings account interest rates and corresponding APYs will surpass those of brick-and-mortar banks.

Use the national average savings rate as your benchmark. You should easily find a bank offering an APY multiple times higher than the national average.

To grasp the potential benefits of higher-interest earnings, calculate the variance between the APY at a big bank and the yield at an online bank. Remember, the power of compounding enables your interest to earn interest over time.