Savings rates are rising, but this is a fairly recent development. Throughout the 2000s and 2010s, rates trended low—nosediving after the 2008 financial crisis. But in 2020, the U.S. Federal Reserve started reversing this trend by setting the federal-funds rate at 0.25%—the lowest rate on record—and then gradually increasing it.
Here are today's best rates and the current average yields for traditional Savings accounts, high-yield Savings accounts and money market accounts. Traditional Savings accounts offer an average yield of 0.05%, while money market accounts offer an average yield of 0.83%. However, high-yield Savings accounts offer the highest yields, with an average yield of 2.22%.
On Wednesday, The Federal Reserve raised its benchmark interest rate by half a percentage point, bringing the federal-funds rate up to the highest level it’s been since 2008. This is significant because it could lead to higher yields for savers, as banks and other financial institutions are likely to pass on some of the rate increase to customers.
You can earn 4.11% on your Savings balance with this online, high-yield Savings account today. That's more than three times the average yield of a traditional Savings account and nearly five times the yield of a money market account. It's also one of the highest yields available on the market right now.
A checking account and a Savings account are two basic, but very important, accounts for managing money. And while there isn't any one-size-fits-all solution for finding the best account, there are a few things to consider when choosing a high-yield Savings account.
UFB Direct is a solid online bank with competitive APYs on both money market and high-yield Savings accounts. But UFB Direct's other account features—such as mobile check deposits, free transfers and no monthly fees—make this bank an attractive option for those looking for a high-yield Savings account.
With another rate hike expected from the Fed next week, here's what experts want you to know about saving right now. First, it's important to shop around and compare yields on high-yield Savings accounts. Second, start with an online bank, as these tend to offer higher yields than traditional banks. Third, look for accounts with no monthly fees and no minimum balance requirements.
If you have some cash in an online, high-yield Savings account, you may have been pleasantly surprised in 2022 by your interest rate. That's because the Federal Reserve has been raising rates since the start of the year, and this rate increases have been passed on to savers.
But it’s important to remember that even if the Fed raises rates more in the future, the yield on your account may not increase. That's because banks and other financial institutions can choose whether or not to pass on rate increases to customers.
For banks and credit unions offering the top rates, check out our list of the best high-yield Savings accounts. We've included both online and traditional banks, as well as credit unions, so you can find the best rate for your Savings.
When you're comparing rates, it's important to look at the annual percentage yield (APY). This is the rate used to calculate the interest you'll earn on your Savings account balance over the course of a year.
And keep in mind that high-yield Savings accounts may have minimum balance requirements, as well as fees for withdrawals and transfers. So be sure to read the fine print before opening an account.
Finally, it's important to remember that interest rate are still historically low. So if you're looking for a higher yield on your Savings balance, it may be worth considering other options, such as certificates of deposit (CDs) or money market accounts.
With the right account, you can maximize your Savings and take advantage of the current high yields. By doing your research, you can find the best high-yield Savings account for you and your financial goals.
