Best savings rates today – APYs remain high ahead of inflation data, July 9, 2024

Savers have enjoyed the benefits of high savings rates over the past two years, but time is running out. As soon as the Federal Reserve cuts rates, your interest rate will likely fall as well.

Whether the Fed cuts rates at the upcoming Federal Open Market Committee on July 30-31 will largely depend on the June Consumer Price Index and Producer Price Index reports due this week, according to Ed Mahaffy, President and Senior Portfolio Manager at ClientFirst Wealth Management.

“While the consensus is that the Fed will begin cutting rates in September, if CPI and PPI decline significantly, the Fed could cut rates at the FOMC meeting in July,” Mahaffy said.

In other words, the sooner you open a savings account, the more interest you can earn.

Experts recommend comparing rates before opening a savings account to get the best possible APY. You can enter your information below to see rates from CNET’s partners in your area.

Today’s best savings rates

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

Why do savings interest rates change?

The Fed has no direct influence on the savings rate, but its decisions do have a domino effect on the average consumer.

When the Fed raises the federal funds rate — the interest rate that U.S. banks use to lend to each other — banks typically raise their savings account interest rates. Conversely, when the Fed lowers interest rates, banks also lower their savings account interest rates.

Please note that savings interest is variable. This means that banks can change the interest on your savings account at any time.

How long will savings interest rates remain high?

Savings rates have been high over the past two years as the Fed regularly raised rates to combat record inflation.

However, as inflation began to show signs of cooling in late 2023, the Fed opted to maintain its target range of 5.25% to 5.5% across its past seven Federal Open Market Committee meetings. As a result, savings rates have remained attractive and barely changed as banks anticipate the Fed’s next move. In fact, we haven’t seen any change in the accounts we track since EverBank cut the interest rate on its high-yield savings account from 5.15% APY to 5.05% APY on May 31.

Experts expect interest rates to fall before the end of the year, which means savings rates are likely to fall as well. While some expect interest rates to fall as early as July, others are hesitant to say a rate cut could happen so soon.

“For the Federal Reserve to consider cutting rates, they need to see a sustained decline in inflation and assurance that it won’t rise again,” said Anthony Saccaro, president of Providence Financial and Insurance Services. “At this point, the economic data doesn’t warrant a rate cut.”

Based on CNET’s weekly tracking, here’s how the rates compare to last week:

Top Reasons to Open a High-Yield Savings Account Today

High-yield savings accounts offer a low-risk way to grow your savings while benefiting from compound interest. Compound interest can make your money grow faster because you’re not just earning interest on your initial deposit — your interest is earning interest, too.

What else sets HYSAs apart:

• High scores: According to the Federal Deposit Insurance Corporation, HYSA APYs are often 10 times (or more) above the national average.
• Low or no cost: Monthly maintenance fees can eat into your savings. Many online banks can charge low or no fees due to their lower operating costs.
• Liquidity: You can withdraw money from your HYSA at any time without penalty (as long as you take into account any withdrawal limits).
• Accessibility: If you open a HYSA with an online bank, you will have 24/7 access via the mobile app. You may also have many customer service options, including phone, online chat, and secure messaging.
• Low risk: HYSAs are protected by federal deposit insurance when held at an FDIC-insured bank or credit union that is insured by the National Credit Union Administration. That means your money is safe up to $250,000 per account holder, per account type.

Factors to Consider When Choosing a Savings Account

While a high APY is important, you should consider more than just the APY before opening a high-yield savings account.

“Some accounts have required minimums, transaction fees, or other charges that you might not expect,” he said. Ben McLaughlin, chief marketing officer and president of digital savings marketplace Raisin. “These hidden fees can eat into your savings, so make sure you’re happy with the terms and conditions before you open an account.”

To find an account that fits your financial goals, consider the following:

• Minimum deposit requirements: Some HYSAs require a minimum amount to open an account — typically between $25 and $100. Others require nothing.
• Access to ATM: Not every bank offers cash deposits and withdrawals. If you need regular access to ATMs, check to see if your bank offers ATM fees or a wide range of ATMs in its network.
• Cost: Be aware of monthly maintenance, withdrawal and paper statement fees. These fees can affect your balance.
• Accessibility: If you prefer personal assistance, look for a bank with physical locations. If you like to manage your money digitally, consider an online bank.
• Recording limits: Some banks charge an additional withdrawal fee if you make more than six monthly withdrawals. If you think you need to make more, consider a bank without this limit.
• Federal deposit guarantee: Make sure your bank or credit union is insured with the FDIC or the NCUA. This way, your money is protected up to $250,000 per account holder, per category, if a bank failure occurs.
• 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 a feel for what it’s like to work with the bank.

Methodology

CNET rated savings accounts at more than 50 traditional and online banks, credit unions and financial institutions serving the nation. Each account received 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 using a set of established criteria that compare annual percentage yields, 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
• Automated savings functions
• Advisory/coaching services for asset management
• Cash deposits
• Extensive ATM networks and/or ATM discounts for out-of-network ATM use

A savings account may be rated lower if it doesn’t have an easy-to-navigate website or if it doesn’t offer convenient features like a debit card. Accounts that impose restrictive residency requirements or fees for exceeding monthly transaction limits may also be rated lower.