The Bankrate promise
At Bankrate we strive to help you make smarter financial decisions. While we adhere to strict , this post may contain references to products from our partners. Here's an explanation for .
Though the rates on savings accounts have remained low at many big banks, there have been significant rate increases at online and community banks over the past year. The Federal Reserve’s rate hikes throughout 2022 translated to higher rates on top-yielding savings accounts.
While inflation is still outpacing rates on savings, getting a higher yield can better help you keep up with inflation, as well as earn returns on money that would otherwise remain stagnant.
Here are some tips to help you get the best rate on your savings.
1. Research current savings account rates
The first step to get the best annual percentage yield (APY) is to understand what’s considered competitive in the current interest rate environment. The best savings accounts today pay around 4 percent APY. Meanwhile, the national average is 0.19 percent APY, and many big banks continue to offer rates that are much lower.
Compare rates at multiple brick-and-mortar banks, online banks and credit unions. Online banks tend to pay higher rates than traditional banks.
While big banks typically don’t pay high rates, they can offer additional perks for loyalty rewards, such as for using other bank services or keeping a high balance across accounts at the bank.
Local credit unions are another option. These are not-for-profit, member-owned institutions that distribute their profits to their members. This may translate into higher savings rates.
2. Compare high-yield savings accounts online
Doing a more targeted search comparing high-yield savings accounts is an easy way to find the best APYs. Most of these accounts are from online banks (though not all of them), so make sure you’re comfortable banking online. Online banks are just as safe as regular banks.
When comparing accounts, look for features and associated fees. Much of the important information about the account can be found in fee schedules and disclosures. Some things to look out for include:
- Monthly maintenance fees
- Minimum balance requirements
- Transaction limits and penalties
- Automated savings features
- Options for transferring money in and out of the account
- Past account problems such as data breaches
If the bank has low or no fees and helpful tools, consider that in your evaluation. You may be willing to choose a bank with a slightly lower APY if its tools help you save more money over time.
3. Avoid tiered interest rates
Some banks offer tiered interest rates to reward customers who maintain higher balances. Savings accounts may offer premium rates if you deposit at least $10,000 or $25,000, for example.
However, you can find top-yielding accounts that pay the same yield across all balances. If you end up stashing all of your money into a savings account to meet the balance requirement, you might miss out on other investment opportunities. In many cases, excess cash may be better off invested in the market with a target annual return rate of 6 to 8 percent. Plus, if you need to withdraw some of the cash in a tiered-rate savings account, your rate might drop.
4. Avoid teaser rates
The best available interest rates may be short-lived. Banks may offer teaser or promotional rates, which are attractive interest rates used to get new customers to open a savings account. Banks may significantly lower the teaser rate after just a few months.
You may also have to maintain a minimum balance and meet other requirements to get the high rate. Always check the fine print explaining the rate’s terms.
5. Consider switching banks
A Bankrate survey from 2022 found that, on average, consumers have stuck with the same savings account for nearly 17 years. One of the top reasons cited was simply that “It’s the account I’ve always had.”
But if your current savings account is only offering average or below average rates, it might be time to switch banks, especially in an environment where savings rates are increasing significantly. Some of the top rates have an over 4 percent APY — that’s an opportunity you could be missing out on if you settle with a familiar but low-paying account.
Shop around for the best savings rates, and look into transferring your money into a new account if one appeals to you.
— Autumn Cafiero Giusti contributed to a previous version of this article.