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When shopping around for the savings accounts for you, it’s important to know what you want from it. It’s also important to learn how your options stack up against the competition. For instance, are you currently earning below the average savings account interest rate? You might be surprised at what kinds of rates are available out there, especially at newer, online-centric banks. If you have questions about how your savings account fits into your overall financial plan, consider working with a financial advisor. Average Interest Rate for Savings AccountsAccording to the FDIC, the national average interest rate on savings accounts stands at 0.13% APY (as of Aug. 15, 2022). This applies to both average and jumbo deposits, which are accounts with a balance over $100,000. While it was once easy to find a savings account at your local bank offering rates upwards of 3%, rates dropped precipitously following the Great Recession. In fact, in 2009, the national rate fell to approximately 0.22% for average savings deposits. This decline in rates is thanks in large part to the Federal Reserve lowering rates in December of 2008 and holding them steady until 2015. The Fed made four rate hikes in 2018, which helped boost savings account APYs. However, they dropped three times in 2019. Then came the 2020 COVID-19 pandemic, which caused another major drop in rates. You’ll typically find the lowest interest rates at brick-and-mortar banks. Big banks often offer something close to a 0.01% APY on their most basic savings accounts. There is sometimes an opportunity to earn at a better rate on higher balances, but even this higher tier rarely goes beyond 0.10% APY. If you’re looking for the best rates in the industry, you’ll have much better luck with savings accounts at online banks. Interest rates in this category get bumped up quite a bit over their traditional counterparts. These high rates are often accessible to customers regardless of balance tier. Some of the best online savings accounts are at Ally Bank, Marcus by Goldman Sachs and Synchrony.
Average Interest Rates for Linked Checking-Savings AccountsOften, savings accounts can earn higher rates if you link it with a checking account from the same bank. Some banks may even offer a separate savings account, with a higher rate, that requires a linked checking account. This is typically the case with big banks that can’t offer the most competitive rates overall. For example, the Chase Premier Savings account normally earns 0.01% APY. However, if you link either a Chase Premier Plus Checking or Chase Premier Platinum Checking account, you can earn at slightly higher rates. Your linked checking account must also have at least five customer initiated transactions per statement period.
Bottom LineThe average interest rate on a savings account is very low – low enough that your savings won’t keep pace with inflation. However, you can beat the average and find the best savings account rates by opening an online savings account. If having in-person access to your accounts is important to you, then you can still check out accounts at traditional banks. Just understand that these banks will likely offer the lowest rates on their savings accounts. These rates will be below the national average, and well below what you could earn at an online bank. Tips on Finding the Right Bank
Photo credit: ©iStock.com/andresr, ©iStock.com/MStudioImages, ©iStock.com/lovelyday12 Lauren Perez, CEPF® Lauren Perez writes on a variety of personal finance topics for SmartAsset, with a special expertise in savings, banking and credit cards. She is a Certified Educator in Personal Finance® (CEPF®) and a member of the Society for Advancing Business Editing and Writing. Lauren has a degree in English from the University of Rochester where she focused on Language, Media and Communications. She is originally from Los Angeles. While prone to the occasional shopping spree, Lauren has been aware of the importance of money management and savings since she was young. Lauren loves being able to make credit card and retirement account recommendations to friends and family based on the hours of research she completes at SmartAsset. Categories
How much would 10000 earn in a savings account?Currently, money market funds pay between 0.85% and 1.05% in interest. With that, you can earn between $85 to $105 in interest on $10,000 each year.
Which bank gives 7% interest on savings account?The average monthly balance requirement is Rs 2,000 to Rs 5,000. Ujjivan Small Finance Bank is offering interest rates up to 7 percent on savings accounts. Equitas Small Finance Bank is offering interest rates up to 7 percent on savings accounts. The average monthly balance requirement is Rs 2,500 to Rs 10,000.
How much interest will a savings account earn?The average APY in the U.S. is 0.06%. Some banks pay as low as 0.01% or as high as 0.5% or more.
Which bank gives 6% interest in savings account?Digital Federal Credit Union offers 6.17%, Blue Federal Credit Union offers 5.00%, Landmark Credit Union offers 7.50%, online bank Mango Money offers 6.00% and Consumers Credit Union and online bank T-Mobile Money, both offer 4.00%.
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