High savings APYs won’t last long – don’t wait to get a good interest rate. Current rates, November 20, 2024

Since the Federal Reserve began cutting rates in September, savings rates have taken a hit. Earlier this year the APY on my savings account was 4.25%, but now it is 4.00%. Despite the fact that inflation rose for the first time in months in October, a third interest rate cut in December cannot be ruled out. That could lower savings rates even further.

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 forever.

Even though some banks offer APYs higher than what I earn, I stick with my high-yield savings account to grow my money. It is not always about the highest interest rate. I am satisfied with my bank and do not need to chase a welcome bonus to realize short-term profits.

If you still have your money in a traditional savings account, it’s worth taking the step to earn interest and grow your emergency or sinking fund. Waiting can mean leaving money on the table.

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

How the Fed’s Rate Decision Affects Savings APYs

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 rate cut this year on September 18, many banks tracked by CNET began cutting interest rates on their savings accounts. For example, LendingClub lowered its APY from 5.30% to 5.15% on October 18, ending its run as our best HYSA. On November 7, the interest rate was reduced even further to 5.00% APY.

Fortunately, the best savings accounts still offer rates that are much higher than the national average. Don’t wait too long and take advantage of a great price. The November rate cut will likely reduce APYs very soon.

Here are the savings interest rates at the beginning of this week compared to the beginning of last week:

Factors to consider before opening a high-yield savings account

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.

What you should pay attention to with a high-yield savings account

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 immediate financial goals.

“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: Consider the costs for 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 FDIC or the NCUA. 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 networks 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.
**Weekly percentage increase/decrease from November 11, 2024 to November 18, 2024.

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