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The central theses

  • Top savings accounts with high interest rates bring up to 5.55% effective annual interest.
  • Experts predict interest rate cuts this year.
  • Even if interest rates fall later in the year, high-yield savings accounts will continue to offer better annual percentage rates than traditional accounts.

The best high-interest savings accounts earn an annual percentage rate of up to 5.55%. But the clock is ticking.


Sarah Tew/CNET

The Federal Reserve's next move will largely depend on today's inflation report. If the data shows positive signs of a cooling off, the Fed could begin cutting interest rates at its upcoming Federal Open Market Committee meeting on July 30-31.

“Although the Fed is widely expected to begin cutting rates in September, the Fed could cut rates at the July FOMC meeting if the Consumer Price Index (CPI) and Producer Price Index (PPI) fall significantly,” said Ed Mahaffy, president and chief portfolio manager at ClientFirst Wealth Management.

So now is the right time to take advantage of high APYS, because waiting could mean leaving money on the table.

Experts recommend comparing interest rates before opening a savings account to get the best possible APR. You can enter your details below to see rates from CNET partners in your area.

The best savings rates today

Here are some of the best savings account APYs currently available:

Bank APY Minimum deposit to open
My Banking Direct 5.55% 500 US dollars
TAB Bank 5.27% $0
Newtek Bank 5.25% $0
UFB Direct 5.25% $0
SynchronyBank 4.75% $0
Capital One 4.25% $0
Discover the bank 4.25% $0
Bank of the Allies 4.20% $0
APYs as of July 10, 2024, based on the banks we track at CNET.

Why savings interest rates fluctuate

The Fed does not have direct influence on savings rates, but its decisions have an impact on the average consumer.

When the Fed raises the federal funds rate – the rate that U.S. banks use to borrow or lend money overnight – banks tend to raise their savings account rates. Conversely, when the Fed lowers interest rates, banks also lower savings rates.

Remember that savings rates are variable, which means that banks can change the interest rate on your savings account at any time.

This is how savings interest rates stand today

High savings rates have been the theme for most of the past two years as the Fed regularly raised interest rates to combat record inflation.

However, as inflation began to show signs of cooling in late 2023, the Fed decided to maintain its target range of 5.25% to 5.5% at its last seven Federal Open Market Committee meetings. As a result, savings rates remained attractive and barely moved while banks waited for the Fed's next move. In fact, we have seen no changes in the accounts we track since EverBank cut the interest rate on its high-yield savings account from 5.15% per annum to 5.05% per annum on May 31.

Experts expect interest rate cuts before the end of the year, which means that savings rates are also likely to fall. While some expect interest rate cuts as early as July, others are hesitant to risk a rate cut so soon.

“For the Federal Reserve to consider cutting interest rates, it needs to see a sustained decline in inflation and assurance that it will not rise again,” said Anthony Saccaro, president of Providence Financial and Insurance Services. “Currently, the economic data does not justify a rate cut.”

Based on CNET's weekly tracking, prices look like this compared to last week:

CNET Average Savings APY Weekly change* FDIC Average
4.88% No change 0.45%
APYs as of July 10, 2024. Based on banks we track at CNET.
*Weekly percentage increase/decrease from July 1, 2024 to July 8, 2024.

How to benefit from opening a high-interest savings account

High-yield savings accounts offer a low-risk way to grow your savings while benefiting from compound interest. Compound interest can make your money grow faster because you not only earn interest on your original deposit, but your interest also earns interest.

Here you can find out what else makes HYSAs special:

  • High rates: As observed by the Federal Deposit Insurance Corporation, HYSAs often have an APY that is ten times (or more) higher than the national average.
  • Low or no fees: Monthly account maintenance fees can eat into your savings. Many online banks can charge low or no fees thanks to their lower operating costs.
  • Liquidity: You can access the money in your HYSA at any time without penalty (as long as you respect any withdrawal limits).
  • Accessibility: If you open a HYSA with an online bank, you will have 24/7 access to it through the mobile app. You may also have many customer service options available to you, including phone, online chat, and secure messaging.
  • Low risk: HYSAs are protected by federal deposit insurance when held at an FDIC-insured bank or credit union insured by the National Credit Union Administration. This means your money is safe up to $250,000 per account holder, per account type.

How to choose the right savings account

While a high APR is important, you should consider more than just the APR before opening a high-yield savings account.

“Some accounts have mandatory minimums, transaction fees or other fees you may not expect,” said Ben McLaughlin, chief marketing officer and president of digital savings marketplace Raisin. “These hidden fees can eat into your savings, so make sure you're comfortable with the terms and conditions before opening an account.”

To find an account that fits your financial goals, consider the following:

  • Minimum deposit requirements: Some HYSAs require a minimum amount to open an account—usually between $25 and $100. Others require nothing at all.
  • ATM access: Not every bank offers cash deposits and withdrawals. If you need to use ATMs regularly, check if your bank offers fee reimbursement or a wide range of ATMs in the network.
  • Fees: Be aware of fees for monthly account maintenance, withdrawals and statement payments. These costs can reduce your balance.
  • Accessibility: If you prefer personal support, look for a bank with branches. If you like managing your money digitally, consider an online bank.
  • Withdrawal limits: Some banks charge an excessive withdrawal fee if you make more than six withdrawals in a month. If you think you need to withdraw more, consider a bank without this limit.
  • Nationwide deposit protection: Make sure your bank or credit union is insured by either the FDIC or the NCUA. This way, in the event of a bank failure, your money is protected up to $250,000 per account holder, per category.
  • Customer service: Choose a bank that is responsive and easy to get help with your account when you need it. Read online customer reviews and contact the bank's customer service to get a feel for what it's like working with the bank.

methodology

CNET reviewed savings accounts at more than 50 traditional and online banks, credit unions and financial institutions with nationwide service. Each account received a score ranging from one (lowest) to five (highest). The savings accounts listed here are all insured by the FDIC or NCUA up to $250,000 per person, per account category and per institution.

CNET rates the best savings accounts based on a set of established criteria that compare annual percentage returns, monthly fees, minimum deposits or balances, and access to physical branches. None of the banks on our list charge monthly account maintenance fees. An account is ranked higher if it offers any of the following benefits:

  • Account bonuses
  • Automated savings functions
  • Consulting/coaching services in the area of ​​asset management
  • Cash deposits
  • Extensive ATM networks and/or ATM discounts for using ATMs outside the network

A savings account may be rated lower if it does not have a user-friendly website or if it does not offer helpful features such as a debit card. Accounts that impose restrictive residency requirements or fees for exceeding the monthly transaction limit may also be rated lower.

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