January 29, 2024 – Forbes Advisor

January 29, 2024 – Forbes Advisor

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Savings account rates were mixed compared to a week ago. You can now earn 5.84% or more on your savings.

Shopping for an account where you can put some money? Here’s a look at some of the best savings rates you can find today.

Related: Compare the Best High-Date Online Savings Accounts

Traditional Savings Account Rates Today

Traditional savings accounts, called “statement savings accounts” within the banking industry, are known for paying low interest. That is slowly changing, thanks to the Fed’s attempts to fight inflation with repeated interest rate hikes.

The current top rate on a standard savings account with a $2,500 minimum deposit requirement is 5.84%, according to data from Curinos. If you’ve got a basic savings account with a rate in the general area, you’ve found a good deal. A week ago, the best yield was also 5.84%.

The current average APY for a traditional savings account is 0.23%, Curinos said. The APY, or annual percentage yield, shows the actual return your account will earn in a year. This includes compound interest, which is interest that builds on the interest you already have in your account.

High-Yield Savings Account Rates Today

High-yield savings accounts usually pay higher interest than conventional savings accounts. But the trade-off is that you have to meet the strict conditions set by the bank or credit union. Usually, that means making a large deposit to open the account.

On high-yield accounts that require a minimum deposit of $10,000, the best interest rate today is 4.51%. That is unchanged from a week ago.

The average APY for accounts is now 0.23% APY, roughly the same as a week ago.

On high-yield savings accounts with a minimum opening deposit of $25,000, the highest rate currently offered is 4.89%. You’re in good shape if you can get an account that offers a rate close to 4.89%. Last week at this time, the best rate was the same 4.89%.

The current average is 0.25% APY for a high yield account with a $25,000 minimum deposit. That’s the same as last week’s APY.

Money Market Account Savings Rates Today

Money market accounts (MMAs) are savings accounts that have some of the properties of checking accounts. Usually, you can write checks and enjoy debit card privileges.

MMAs tend to pay slightly higher interest than standard savings accounts. The FDIC says the average MMA rate is 0.65% compared to 0.47% for a traditional savings account.

But today, the best money market accounts have rates as high as 5.13%. That was consistent with a peak rate of 5.13% from a week ago.

The average APY for an MMA is now 0.57%, up from 0.56% last week at this time, according to Curinos.

Related: Savings Rates Forecast January 29, 2024

How to Choose a Savings Account

Whether you’re looking for a traditional savings account, high-yield savings account or MMA, you’ll want to keep a few key points in mind.

An attractive interest rate is important, but it is not the only factor that is important when choosing an account to hold your savings. Another big consideration is whether the account has a minimum deposit—and whether you have enough money to fund the account.

You also want to keep an eye on the bills. Savings accounts can have monthly maintenance fees, excessive transaction fees (if you ignore withdrawal limits) and other annoying fees that can eat into your returns.

And before you apply for an account, check the reputation and safety of a financial institution. You should trust your bank or credit union and feel that you are in good hands. Read reviews, see what other consumers are saying about customer service and learn how the financial institution responds to consumer questions.

Look for an account that is insured by the FDIC or, in the case of credit unions, the NCUA. Those federal agencies provide up to $250,000 of insurance per depositor and per bank for each category of account ownership.

How High is the Savings Rate?

It’s hard to say—it depends on the path of inflation and the overall economy.

The highest interest rates in recent history were seen in the early 1980s when the Fed raised the federal funds rate to over 19%. That’s the answer to record-breaking inflation with prices rising at a rate of more than 14% annually.

In the early 1980s, the average five-year CD paid nearly 12%, compared to less than 2% today, according to Bankrate data. Savings rates eventually fell as inflation cooled and the federal funds rate was lowered.

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Curinos determines the average fees for savings accounts by focusing on those intended for personal use. Certain types of savings accounts—such as relationship-based accounts and accounts designed for youth, seniors and students—are not considered in the calculation.

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