Interest rate for a savings account: a suitable figure
In the current financial landscape, savvy savers are taking advantage of high-yield savings accounts and credit unions to grow their savings safely and efficiently. Bankrate, a trusted source for financial information, offers a comprehensive list of the best online banks and credit unions, complete with current rates, minimum balance requirements, and key features.
Today's best high-yield savings accounts are earning APYs of around 4.25 percent, offering an exceptional opportunity to grow savings safely while preserving and growing purchasing power. For instance, $1,000 in a high-yield savings account with a 4.25% APY would earn $42.50 in one year. Similarly, $50,000 in the same account would earn a substantial $2,125 in a year.
Short-term goals such as saving for a vacation, wedding, or home down payment within the next 2-3 years can be achieved with a high-yield savings account. Money market accounts, which offer similar rates but with added features like check-writing privileges and debit card access, often require higher minimum balances.
It's important to note that the national average of savings account APY is 0.59% according to Bankrate data. This means that today's savers can take advantage of high returns that may not stay this high indefinitely. In fact, the current average APY for savings accounts at online banks and credit unions is approximately between 2.3% and 2.7% per annum, with typical advertised rates such as 2.26% and 2.67% reported as recent examples. Promotional or special rates can be higher, but the standard averages tend to center around this range in mid-2025.
CDs (Certificates of Deposit) are another option for those looking to lock in their rate for a specific term. Current CD rates range up to 4.50% APY depending on term length. However, keep in mind that CDs are less liquid than high-yield savings accounts, as early withdrawal penalties may apply.
Cash reserves can earn interest in a high-yield savings account while staying completely liquid. Emergency funds, which should ideally cover 3-6 months of expenses, are a perfect place for this type of savings due to its growth and accessibility.
In addition, top savings rates are beating inflation by over 1.5 percentage points. With current inflation sitting at 2.7% annually, this means that your savings are growing at a rate that outpaces the loss of purchasing power due to inflation.
To help you pick the right savings account for your needs, Bankrate offers a guide to choosing the best savings account for you. Start earning more on your savings today by exploring Bankrate's list of the best online banks and credit unions.
