Earn while you can: High savings APYs are quietly declining. Current rates, November 22, 2024

Rates for high-yield savings accounts are falling rapidly. Overnight, Capital One lowered its savings rate from 4% to 3.9%. Citizens Bank went from 4.15% to 3.9%. And now my own HYSA is at 3.85%, compared to 4% earlier this week.

It’s clear that the days of high interest rates are coming to an end. Some high-yield savings accounts still offer annual returns of more than 5% – more than ten times that national average — but experts don’t expect the high savings rate to last for long. In fact, banks have already started cutting rates in addition to the Federal Reserve’s cuts.

If you’re still keeping your emergency or sinking fund in a traditional savings account, it’s worth taking the step to earn interest on the money you save. Otherwise, you may miss out on growing your savings.

Here are some of the best savings account APYs available today:

Experts recommend comparing rates before opening a CD account to get the best APY possible. Enter your details below to get the best CNET affiliate rates for your region.

What happens to savings APYs if the Fed cuts rates?

Inflation has risen slightly in the past week and rose by 2.6% year-on-year last month. That news raises the question of what the central bank will do next month at the Federal Open Market Committee meeting. After all, interest rates often move with the Federal Reserve.

To be clear, the Fed does not directly set rates on consumer products such as high-yield savings accounts and certificates of deposit, but its policies do have a ripple effect.

When the Fed raises the federal funds rate—as it has done 11 times in recent years to combat high inflation—banks tend to increase their APYs. Likewise, when the Fed cuts rates, banks tend to lower their APYs.

“The Fed controls short-term interest rates, which directly influence the rates banks offer on savings accounts,” said Justin Haywood, certified financial planner and chairman of the U.S. central bank. Haywood Asset Management. Depending on the bank, it may take several weeks or even months for the changes to take effect.

After the Fed made its first interest rate cut this year in September, many CNET-followed banks started cutting interest rates on their savings accounts. For example, LendingClub lowered its APY from 5.3% to 5.15% on October 18, ending its run as our best HYSA. On November 7, it lowered it even further to 5% APY.

And despite the latest rise in inflation, a third interest rate cut in December cannot be ruled out. That could lead to interest rates falling even further.

Fortunately, the best savings accounts still offer rates that are much higher than the national average. But don’t wait too long to get your hands on a great prize. Here are the savings interest rates at the beginning of this week compared to the beginning of last week:

Why you should consider a HYSA

Even though interest rates are falling, a savings account with a high return is still worthwhile.

Melissa Murphy Pavone, founder of Conscious financial partnersrecommends keeping a separate emergency fund in a high-yield savings account so you can access it easily. Even if you want to maximize your income, accessing your money when you need it is much more important to your short-term money goals.

To earn interest on your short- and long-term goals, Pavone suggests a tiered savings strategy. For example, keep money in a HYSA for your immediate and short-term financial goals (within the next two years). For long-term goals, she recommends CDs or Treasury bills. Both still have competitive rates and some degree of rate lock protection to give you guaranteed returns.

This way you can find the right high-yield savings account for you

Choosing a high-yield savings account isn’t just about choosing the best interest rate; you must first consider what you want to achieve from using these financial products.

Instead of constantly chasing higher interest rates, which can change frequently, focus on your financial goals and what benefits will benefit you.

“Feeling safe and prepared is as valuable as every percentage point of revenue,” she said.

When deciding which account and bank are best for your savings, consider the following:

• Minimum deposit requirements: Some HYSAs require a minimum amount to open an account, typically between €25 and €100. Others don’t need anything.
• ATM access: Not every bank offers cash deposits and withdrawals. If you need regular ATM access, check to see if your bank offers ATM refunds or a wide range of in-network ATMs, says Lanesha Mohip, founder of Polished CFO and member of the CNET Expert Review Board.
• Costs: Take into account the costs of monthly maintenance, withdrawals and paper statements, Mohip says. The charges may affect your balance.
• Accessibility: If you prefer personal assistance, look for a bank with physical branches. If you prefer to manage your money digitally, consider an online bank.
• Withdrawal limits: Some banks charge additional withdrawal fees if you make more than six monthly withdrawals. If you think you may need to earn more, consider a bank without this limit.
• Federal deposit insurance: Make sure your bank or credit union is insured with the Federal Deposit Insurance Corporation or the National Credit Union Administration. In this way, your money is protected up to €250,000 per account holder, per category, in the event of a bank failure.
• Customer service: Choose a bank that is responsive and makes it easy to get help with your account when you need it. Read online customer reviews and contact the bank’s customer service to get an impression of the cooperation with the bank.

Methodology

CNET reviewed savings accounts at more than 50 traditional and online banks, credit unions and financial institutions with nationwide services. Each account was given a score between one (lowest) and five (highest). The savings accounts listed here are all insured up to $250,000 per person, per account category, per institution, by the FDIC or NCUA.

CNET evaluates the best savings accounts against a set of established criteria that compare annual returns, monthly fees, minimum deposits or balances and access to physical branches. None of the banks on our list charge monthly maintenance fees. An account will score higher if it offers any of the following benefits:

• Account bonuses
• Automatic savings functions
• Advice/coaching in the field of asset management
• Cash deposits
• Extensive ATM network and/or ATM discounts for out-of-network ATMs

A savings account may receive a lower rating if it does not have an easy-to-navigate website or if it does not offer convenient features such as an ATM. Accounts that impose restrictive residency requirements or fees for exceeding monthly transaction limits may also receive a lower rating.

*APYs as of November 20, 2024, based on the banks we track at CNET.
**This week’s APY as of November 18, 2024. Based on the banks we track at CNET.
***Weekly percentage increase/decrease from November 11 to November 18, 2024.

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