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Average rates on various types of savings accounts are mostly higher than a week ago, with top rates hitting 2.50%. Are you looking for an account where you can save money? Here’s a rundown of the best savings rates you’ll find today.
Related: Compare the Best High Yield Savings Accounts
Savings Rate Today: Traditional Savings Account
Traditional savings accounts, known as “statement savings accounts” in the banking industry, are infamous for paying minimal interest in recent years. That is changing, thanks to the Federal Reserve’s interest rate hike campaign.
Today’s highest interest rate on a standard savings account is 2.19%, according to data from Bankrate.com. If you land a basic savings account with a rate in this ballpark, you’ve found a good deal. A week ago, the best rate was also 2.19%.
The national average rate is just 0.13%, according to the most recent data from the FDIC, the government agency that insures bank deposits. Today’s average APY for a traditional savings account is 0.59%, according to Bankrate.
APY, or Annual Percentage Rate, reflects the actual return your account will earn for a year. It takes into account compound interest, which is the interest that accumulates on the interest in your account.
Savings Rate Today: High Yield Savings Account
High yield savings accounts generally earn much higher interest than a conventional savings account. But the tradeoff is that you’ll have to meet strict terms set by the bank or credit union. Often this means making a large deposit to open the account.
On high yield accounts requiring a minimum deposit of $10,000, the current best interest rate is 2.00%. It’s been unchanged for a week.
The average APY for these accounts is now 0.12% APY, down from 0.11% a week ago.
On high-yield savings accounts with a minimum opening deposit of $25,000, the highest rate offered over the past week was 2.50%. You’ll do well if you can find an account with a rate close to that.
The current average is 0.24% APY for a high yield account with a minimum deposit of $25,000. This is above last week’s 0.23%.
Savings Rate Today: Money Market Account (MMA)
Money market accounts are savings accounts that offer some of the benefits of checking accounts. Generally, you can write checks and take advantage of debit card privileges.
MMAs tend to pay slightly higher interest than a standard savings account. The FDIC says the average MMA rate is 0.14%, compared to 0.13% for a traditional savings account.
But today, the best money market accounts have rates as high as 1.73%. This is above the peak rate of 1.49% from a week ago.
The average APY for an MMA is now 0.15%, down from 0.14% this time last week, according to Bankrate.
How to choose a savings account
Whether you are looking for a traditional savings account, a high yield savings account, or an MMA, there are a few things you need to keep in mind.
A good interest rate is important, but it’s not the only factor when choosing an account to hold your savings. Another major consideration is whether the account has a minimum deposit and if you can find the money.
You will also want to understand the fees. Savings accounts can come with monthly maintenance fees, excess transaction fees (if you ignore withdrawal limits), and other annoying fees that can erode your returns.
And before applying for your account, be sure to check the reputation and security of the bank or credit union. Browse reviews, see what account holders have to say about customer service, find out how the financial institution answers consumer questions, and know that your money will be protected.
Get an account insured by the FDIC or, in the case of credit unions, the NCUA. These federal agencies provide up to $250,000 of insurance per depositor per bank for each category of account ownership.