According to the Federal Deposit Insurance Corp, 0.06% APY is the average interest rate for a savings account. If you are looking for good rates that are higher than the national average, then online banks will be your best pick as the brick-and-mortar banks usually provide rates lower than the national average.
The higher the rates, the more your money will grow. For instance, if you deposit $10,000 in a bank with 1.00% APY, you will earn $100 in a year. For the rate of 0.01% APY, you will only earn a dollar.
Savings rates of different banks
Here is the list of the fees and rates of various banks. Larger traditional banks have rates that are lower than the national average while online banks provide better rates in less fees.
Wells Fargo
- APY: 0.01%
- Minimum deposit: $25
- Monthly fee: $5
U.S. Bank
- APY: 0.01%
- Minimum deposit: $25
- Monthly fee: $4
Marcus by Goldman Sachs
- APY: 0.50%
- Minimum deposit: None
- Monthly fee: None
First Tech Federal Credit Union
- APY: 0.05%
- Minimum deposit: $5
- Monthly fee: None
Consumer Credit Union
- APY: 0.03%
- Minimum deposit: $5
- Monthly fee: None
Chase
- APY: 0.01%
- Minimum deposit: None
- Monthly fee: $5
Capital one 360
- APY: 0.40%
- Minimum deposit: None
- Monthly fee: None
Bank Of America
- APY: 0.01%
- Minimum deposit: $100
- Monthly fee: $8,
American Express® National Bank, Member FDIC
- APY: 0.40% APY of 3/11/2021
- Minimum deposit: None
- Monthly fee: None
Ally Bank
- APY: 0.50%
- Minimum deposit: None
- Monthly fee: None
Alliant Credit Union
- APY: 0.55%
- Minimum deposit: $5
- Monthly fee: None for an e-statement, $1 for a paper statement
What is the purpose of saving interest?
Interest helps in multiplying the money deposited in the savings account. Banks pay the interest for using money that you deposit with them. These savings will help you in accomplishing long-term goals or fulfill financial emergencies.
Do savings rates fluctuate?
The savings interest rate can be hiked or lowered at the discretion of the bank. Though they may not occur for months, when the Federal Reserve increases or decreases the rates, banks too would follow the same to compensate for it.
If you want to have a fixed interest rate, open a Certificate of Deposit with your excess money that you will not need immediately.
Where can I get a high savings rate?
Online banking institutions are great if you are looking to get higher rates than the national average. The reason for their high rates is because they don’t have to maintain branches like the brick-and-mortar banks. Online banks also have robust customer service with their sleek applications and 24/7 customer support.
You must also look for banks that have lower monthly fees. Many large banks can charge up to $5 if you don’t maintain a minimum balance, which can offset your interest rate, which is contrary to the motive of a savings bank.
FAQs
1. How Do Savings Accounts Operate?
Savings accounts are meant to be a secure place where you can deposit your money. You can earn interest rates that are higher than the checking account.
2. What Rates Are Good?
The national average savings rate stands at 0.06% but you can get a higher rate at online banks.
3. How Much Should I Deposit in a Savings Account?
You can get an automatic deposit plan. It is advisable to save money worth three to six months’ expenses in your account. You can start depositing for your long-term goals and emergencies. The exact amount depends on your income, expenses, and goals.
