The national average savings account rate has reached its highest level in over a decade due to several rate hikes by the Federal Reserve. However, following the Fed’s rate cuts in September and November, interest rates are beginning to fall.
According to the FDIC, the current national average savings account rate stands at 0.43%. Just two years ago, it was just 0.17%, reflecting a significant increase in a short period. The Federal Reserve raised its benchmark rate in March 2022 to combat inflation and increased rates 11 times before cutting them in September 2024.
Currently, the highest savings account rate available is 4.75% APY from Everbank, with no minimum opening deposit required. Given that these rates may not last long, consider opening a high-yield savings account now to take advantage of the current high rates.
The amount of interest you can earn depends on the annual percentage yield (APY). Compounding daily, your balance grows significantly over time. For example, with a $1,000 deposit at 0.45% APY, your balance would increase by $4.31 after one year. However, with a high-yield savings account at 5% APY, your balance would grow to $1,051.27 and earn $51.27 in interest.
As the amount you deposit increases, so does the potential earnings. With a $10,000 deposit at 5% APY, your total balance after one year would be $10,512.67, earning $512.67 in interest.
Source: https://finance.yahoo.com/personal-finance/article/savings-interest-rates-today-december-110024210.html