January 22, 2024 – Forbes Advisor – Earn Charter

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Rates on savings accounts are mixed compared to one week ago. You can now earn 5.84% or higher on your savings.

Searching for an account where you can put some money aside? Here’s a look at some of the best savings rates you can find today.

Related: Compare the Best High-Yield Online Savings Accounts

Traditional Saving Account Rates Today

Traditional savings accounts, called “statement savings accounts” within the banking industry, are notorious for paying puny interest rates. That’s starting to change, thanks to the Fed’s campaign of interest rate hikes to combat inflation.

Today’s highest rate on a standard savings account with a $2,500 minimum deposit requirement is 5.84%, according to data from Curinos. If you score a basic savings account with a rate in that range, you’ve found a good deal. One week ago, the best yield also was 5.84%.

Today’s average APY for a traditional savings account is 0.23%, Curinos says. Last week, it was 0.23%. APY, or annual percentage yield, depicts the actual return your account will earn in a year. It includes compound interest, which is interest that builds on the interest already in your account.

High-Yield Savings Account Rates Today

High-yield savings accounts often pay much higher interest than conventional savings accounts. But the trade-off is you may have to jump through some hoops for the bank or credit union. Often, that means making a large deposit to open the account.

On high-yield accounts requiring a minimum deposit of $10,000, today’s best interest rate is 4.51%. That’s unchanged from one week ago.

The average APY for those accounts is now 0.24% APY, about the same as a week ago.

On high-yield savings accounts with a minimum opening deposit of $25,000, the highest rate offered today is 4.89%. You’ll be in good shape if you can find an account offering a rate close to 4.89%. Last week at this time, the best rate was a similar 4.89%.

The current average is 0.25% APY for a high-yield account with a $25,000 minimum deposit. That’s above last week’s 0.25%.

Money Market Account Savings Rates Today

Money market accounts (MMAs) are savings accounts that offer some of the perks of checking accounts. Often, you can write checks and take advantage of debit card privileges.

MMAs tend to pay somewhat higher interest than standard savings accounts. The FDIC says the average MMA rate is 0.65% compared to 0.47% for a traditional savings account.

But today, the best money market accounts have rates as high as 5.13%. That’s steady with the top rate of 5.13% from one week ago.

The average APY for an MMA is now 0.56%, down from 0.56% last week at this time, according to Curinos.

Related: Savings Rates Forecast January 22, 2024

How High Can Savings Rates Go?

That’s tough to say—it depends on the path of inflation and the overall economy.

The highest interest rates in recent history were seen in the early 1980s when the Fed hiked the federal funds rate to over 19%. That was in response to record-breaking inflation that had prices rising at a rate of over 14% annually.

In the early 1980s, the average five-year CD paid almost 12%, compared to less than 2% today, according to Bankrate data. Savings rates eventually fell as inflation cooled and the federal funds rate was brought back down.

Methodology

Curinos determines the average rates for savings accounts by focusing on those intended for personal use. Certain types of savings accounts—such as relationship-based accounts and accounts designed for youths, seniors and students—are not considered in the calculation.

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