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Average rates on a variety of savings accounts are slightly lower than a week ago, even as the Federal Reserve prepares to raise interest rates again in September. 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, have been known to pay minimal interest in recent years. This is slowly changing, thanks to the Fed’s campaign to hike interest rates to fight inflation.
Today’s highest interest rate on a standard savings account is 2.19%, according to data from Bankrate.com. If you get a basic savings account with a rate in this general area, 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. But today’s average APY for a traditional savings account is 0.59%, according to Bankrate, up from 0.60% a week ago.
APY, or Annual Percentage Rate, represents 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 significantly higher interest than a conventional savings account. But the tradeoff is that you’ll have to jump through a few hoops for 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 0.13% APY, the same as a week ago.
The current average is 0.28% APY for a high yield account with a minimum deposit of $25,000. This is below last week’s 0.29%.
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 have some debit card privileges.
MMAs tend to pay at least 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 1.83%. This is above the peak rate of 1.73% from a week ago.
The average APY for an MMA is now 0.15%, down from 0.16% this time last week, according to Bankrate.
How to choose a savings account
Whether you’re looking for a traditional savings account, a high yield savings account, or an MMA, there are a few key points you’ll want to remember.
An attractive interest rate is important, but it is not the only factor when selecting an account to deposit 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 be mindful of 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 opening your account, be sure to explore the reputation and security of the bank or credit union. Read reviews, see what account holders have to say about customer service, learn how the financial institution answers consumer questions, and know that your money will be protected.
Look for 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.