When shopping around for the savings accounts for you, it’s important to know what you want from it. It’s also important to learn how your options stack up against the competition. For instance, are you currently earning below the average savings account interest rate? You might be surprised at what kinds of rates are available out there, especially at newer, online-centric banks. If you have questions about how your savings account fits into your overall financial plan, consider working with a financial advisor.
Average Interest Rate for Savings Accounts
According to the FDIC, the national average interest rate on savings accounts stands at 0.33% APY (as of Jan. 17, 2023). This applies to both average and jumbo deposits, which are accounts with a balance over $100,000.
While it was once easy to find a savings account at your local bank offering rates upwards of 3%, rates dropped precipitously following the Great Recession. In fact, in 2009, the national rate fell to approximately 0.22% for average savings deposits.
This decline in rates is thanks in large part to the Federal Reserve lowering rates in December of 2008 and holding them steady until 2015. The Fed made four rate hikes in 2018, which helped boost savings account APYs. However, they dropped three times in 2019. Then came the 2020 COVID-19 pandemic, which caused another major drop in rates.
You’ll typically find the lowest interest rates at brick-and-mortar banks. Big banks often offer something close to a 0.01% APY on their most basic savings accounts. There is sometimes an opportunity to earn at a better rate on higher balances, but even this higher tier rarely goes beyond 0.10% APY.
If you’re looking for the best rates in the industry, you’ll have much better luck with savings accounts at online banks. Interest rates in this category get bumped up quite a bit over their traditional counterparts. These high rates are often accessible to customers regardless of balance tier. Some of the best online savings accounts are at Ally Bank, Marcus by Goldman Sachs and Synchrony.
|Overview of Online Savings Accounts|
|Bank Account||Minimum Balance for Rate||APY|
|TAB Bank High-Yield Savings||$0.01||3.64%|
|Citizens Access Online Savings Account||$0.01||3.75%|
|Ally Bank Online Savings Account||$0||3.30%|
|Marcus by Goldman Sachs High-Yield Savings||$0||3.30%|
|Synchrony High-Yield Savings||$0||3.75%|
Average Interest Rates for Linked Checking-Savings Accounts
Often, savings accounts can earn higher rates if you link it with a checking account from the same bank. Some banks may even offer a separate savings account, with a higher rate, that requires a linked checking account. This is typically the case with big banks that can’t offer the most competitive rates overall.
For example, the Chase Premier Savings account normally earns 0.01% APY. However, if you link either a Chase Premier Plus Checking or Chase Sapphire Checking account, you can earn at slightly higher rates. Your linked checking account must also have at least five customer initiated transactions per statement period.
|Checking-Savings Account APYs|
|Bank Account||Standard APY||Minimum Balance for Relationship Rate||Relationship APY|
|Chase Premier Savings||0.01%||$0 |
|Bank of America Advantage Savings||0.01%||$50,000||0.02%|
|PNC Standard Savings||0.01%||$1 |
The average interest rate on a savings account is very low – low enough that your savings won’t keep pace with inflation. However, you can beat the average and find the best savings account rates by opening an online savings account. If having in-person access to your accounts is important to you, then you can still check out accounts at traditional banks. Just understand that these banks will likely offer the lowest rates on their savings accounts. These rates will be below the national average, and well below what you could earn at an online bank.
Tips on Finding the Right Bank
- Your financial plan should include more than just a savings account. A financial advisor can help with this. Finding a qualified financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
- Both traditional and online banks offer a wide range of options for deposit accounts, with various savings, checking and money market accounts available. Some accounts may earn below the average rate while still offering some handy savings perks. It’s up to you to decide which features benefit you most.
- If you’re disappointed by the low-earning accounts at brick-and-mortar banks, consider whether you’d be comfortable with an online bank. You won’t have access to physical branches, but you’ll typically still have access to ATMs and mobile apps. Online banks are more likely to offer the highest rates to boost your savings.
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