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Are you looking for an account where you can park 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, called “statement savings accounts” by the banking industry, have been infamous for paying minimal interest in recent years. This is gradually changing, thanks to the Federal Reserve and its campaign of interest rate hikes to fight inflation.
Today’s highest interest rate on a standard savings account is 2.18%, according to data from Bankrate.com. If you score 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 2.18%.
The national average rate is just 0.10%, 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, and that’s up from 0.56% a week ago.
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 often earn much higher interest than a conventional savings account. But the catch 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 best interest rate over the past week has been 2.00%.
The average APY for these accounts is now 0.11%, the same as a week ago.
On high yield savings accounts with a minimum opening deposit of $25,000, the highest rate offered today is 2.50%. You will do well if you can open an account with a rate close to that. Last week at this time, the best rate was similar at 2.50%.
The current average is 0.23% APY for a high yield account with a minimum deposit of $25,000. This is a hair below last week’s 0.24%.
Savings Rate Today: Money Market Account (MMA)
Money market accounts are savings accounts that exhibit some of the properties of checking accounts. Generally, you can write checks and take advantage of 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 0.12%, compared to 0.10% for a traditional savings account.
But today, the best money market accounts have rates as high as 1.49%. It is stable with the maximum rate of 1.49% from a week ago.
The average APY for an MMA is now 0.14%, down from 0.13% this time last week, according to Bankrate.
How to buy 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.
A good interest rate is important, but it’s not the only factor when selecting an account to hold your savings. Another important consideration is whether the account has a minimum deposit and whether you have enough money to fund the account.
You will also want to understand the fees. Savings accounts can come with monthly maintenance fees, overage transaction fees (if you ignore withdrawal limits), and other pesky fees that can eat into your returns.
And before signing up for your account, be sure to investigate the reputation and security of the bank or credit union. Browse reviews, see what other consumers have to say about customer service, find out how the financial institution answers consumer questions, and feel like 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.