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Average Savings Account Interest Rate for 2024?

  • The average savings account interest rate in the U.S. is 0.36%.
  • Interest rates are dynamic and fluctuate over time.
  • Factors such as economic changes, Federal Reserve policies and bank competition can all influence interest rates.
  • Online-only banks tend to have better savings account interest rates vs. traditional brick-and-mortar banks, to the tune of 4% APY or more compared to just 1% APY.

The idea that you can make your money work for you is pretty attractive, but earning extra cash on top of your nest egg only works if you have the right rates on deck.

Researching average savings account interest rates and what goes into determining the APY for your savings account is essential. From fees and withdrawal limits to why online banks have a significant edge, everything you need to know is just up ahead.

In this guide to savings account interest rates, we’ll delve into these topics:

  • What is the average savings account interest rate?
  • How average savings account interest rates are calculated
  • How to get the best savings account interest rate

Our top picks for savings accounts

What is the average savings account interest rate?

The average savings account interest rate is 0.36% APY, according to the latest data from the Federal Deposit Insurance Corporation (FDIC).

Many online banks offer interest rates much higher than this national average, with some offering as much as 5% APY. There is even the potential for 7% interest savings accounts, although that rate is not typical for savings accounts at present.

You can see some of the top-rated banks and their savings account interest rates below.

Best high-yield savings accounts for July 2024

Bank APY Monthly fee Minimum opening deposit Withdrawal limits
Synchrony 4.75% $0 $0 - $1,000 per day
- No limit on the number of times
Ally Bank 4.25% $0 $0 10 withdrawals per month
American Express 4.25% $0 $0 - 9 withdrawals per month
- To transfer money in and out, you need to link the savings account to a separate checking account
Marcus 4.50% $0 $0 No withdrawal limit
Barclays 4.35% $0 $0 - Withdrawal limit of $250,000 per transaction
- No limit on the number of times
Capital One 4.25% $0 $0 No withdrawal limit
Citibank 4.30% $4.50 $0 No withdrawal limit
PNC 4.65% $0 $0 Monthly withdrawal cap of 6 transactions

Average savings account interest rates over time

The average interest rate can shift significantly in just a matter of months — from November 2023 to February 2024, the average rate rose by 40% from 0.33% APY to 0.46% APY.

Let’s take a look at historical patterns for interest rates to help you understand how rates fluctuate and what circumstances could affect how much your nest egg earns.

Savings account interest rates before 2008

Interest hit a historic high point in the 1980s when savings account rates peaked at a whopping 8%. Those rates were unsustainable, resulting in APY plummeting in the 90s to the 4% to 5% rates we’re more familiar with now.

We then saw a middle ground in the 2000s, with average rates closer to 1% to 2%.

Savings account interest rates from 2008 onwards

In 2008, a huge economic downturn led to some of the biggest financial instability since the Great Depression. The U.S. Federal Reserve slashed interest rates to encourage borrowing and boost economic activity, and savings account interest rates dipped as low as 0.25%.

Interest rates steadily continued to decrease during the years that followed until they bottomed out at a mere 0.06% APY in 2013, maintaining this level through 2017.

Interest rates then began to rise in 2018 with economic improvements, but the COVID-19 pandemic caused a brief recession and rates were pushed back down. By 2021, the average savings account interest rate had fallen to 0.05%.

In 2022, the Federal Reserve started raising rates due to high inflation. Rates then experienced a significant period of growth until reaching the current average savings account rate of 0.47%.

How average savings account interest rates are calculated

To calculate the average savings account interest rate, we use data from the Federal Deposit Insurance Corporation (FDIC). This government agency monitors savings account interest rates across the country and updates their data each month.

This agency also provides insurance for the money you deposit in a bank to safeguard it in case the bank shuts down.

What affects the average savings account interest rate?

Interest rates ebb and flow along with connected factors that heavily influence how much you’ll get (or, in the cases of other assets, like loans and mortgages, how much you’ll pay).

Economic conditions

The Federal Reserve affects the average interest rate for savings accounts by raising rates when the economy is artificially inflated and lowering rates to bring a sluggish economy back to life. This helps stabilize financial markets in the United States and catalyze consumers into buying, saving or some combination of the two.

Federal Reserve policies

The Federal Reserve is the central bank for the United States. As such, it has the power to set the country’s benchmark interest rate. All other banks then respond by aligning their in-house savings account interest rates accordingly. It’s kind of like a game of follow the leader — the Fed bumps up the benchmark interest rate for savings accounts, and banks raise their own rates to keep a level playing field.

Competition among banks

Banks are always fighting for customers, hence all the ads we see touting tempting welcome bonuses and promises of fee-free deposits and withdrawals. Interest rates are another dangling carrot. One bank doesn’t want to be the only institution on the market with interest rates far below the national average. So, if the Fed raises rates, many banks will toe the line and raise their rates as well to stay competitive.

Some banks may even go above and beyond, with interest rates well above those advertised by the competition. This tends to happen more with online-only banks that offer low or no-fee accounts with sky-high interest. Their lack of overhead (no brick-and-mortar locations, for starters) gives them better margins and more wiggle room.

What is a good rate for a savings account?

Understanding the average interest on savings accounts and what interest rate is “good” might involve two separate (but linked) discussions. The average interest rate in the United States, per the FDIC, is 0.46%. But that’s far below what experts believe to be a solid, favorable rate.

Truthfully, you have to look at interest rates through two lenses:

So, a “good” interest rate seems to be one over 4% APY, but only if you’re comfortable with online banking. If you prefer to bank in person and visit physical branches to manage your account or speak with a customer service agent, you may have to settle for a less-than-stellar interest rate in exchange.

How to get the best savings account interest rate

To get the best savings account interest rate for your needs, consider the following:

1

Research and compare:

Get to know average savings account interest rates and what’s considered favorable for your preferred account type and area.

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2

Prioritize online banks:

These banks usually have more favorable interest rates.

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3

Look for no-fee accounts:

A big interest rate with lots of fees is not as attractive as a slightly lower interest rate with no fees.

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4

Avoid tiered rates:

Tiered rates assign higher APY to higher balances, meaning you could lose out if your balance dips below tip-tier amounts.

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5

Beware of teaser rates:

Read the fine print to make sure your high-yield rate won’t disappear after the promotional period expires.

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Alternatives to savings accounts

If you can’t find a savings account that ticks all your boxes, some alternatives can help you save money and maximize your ROI.

You may want to check out these other options:

Our top picks for savings accounts

FAQ: Average savings account interest rate

What is the average interest rate for savings accounts?

According to the FDIC, the average interest rate on savings accounts as of April 2024 was 0.46% APY. You may be able to get a higher interest rate, however, by doing some research. With online savings accounts, typical interest rates tend to be higher, sometimes exceeding 5% APY. With traditional savings accounts, typically interest rates will be lower, with an average interest rate of 1% APY considered high.

What is a good interest rate on a savings account?

If you’re looking to open a savings account, average interest rates that meet or exceed 4% APY are considered a good deal. That’s well above the national average saving account interest rate of 0.46% APY, but it’s possible to find if you know where to look. To score high interest rates, you may need to search beyond brick-and-mortar banks and consider online-only banks.

Which bank pays 7% interest on a savings account?

As of May 2024, there are no banks in the United States offering an interest rate of 7% APY. Higher-than-normal savings account interest rates are more common with online-only banks, which don’t have the same overhead and expenses as a traditional bank. Even so, high-yield savings accounts with those online banks still rarely exceed 5% APY. Anything over that mark would be considered quite good. Learn more about the pros and cons of high-yield savings accounts to see if you should consider getting one.

How much will I earn per year with $10,000 in a savings account?

The amount you’ll earn in interest with $10,000 in a savings account depends on your interest rate and type. With a high-yield interest rate that compounds monthly, your $10,000 initial deposit could grow to $10,407.42 in one year. That’s far more than you’d get with the average interest rate of 0.46%, which would yield just $46.10 (for a total of $10,046.10) after the same one-year period.

To learn more about how much you could earn, try using our savings calculator.

About the Author

Alana Luna (Musselman)
Alana Luna (Musselman) Writer & Content Strategist

Alana Luna (Musselman) is a versatile storyteller with over a decade of writing experience. She is passionate about helping people build their business through unique and engaging content.

Some examples of her current freelance projects include building content strategies for small businesses, completing industry research to build case studies, crafting buyer guides and more.

She has a passion and keen ability to simplify complex ideas through storytelling to make it easier for readers to understand hard-to-digest information. To accomplish this, Alana’s writing holds strong three principles – content that educates, engages and entertains.

About the Reviewer

Blake Esken
Blake Esken Los Angeles Times

Blake Esken has over 15 years of experience in product management and has been a member of the Los Angeles Times staff for over five years.

As part of his role at the Los Angeles Times Commerce Team, Blake acts as the in-house reviewer and fact checker for LA Times Compare. He supervises all content for compliance and accuracy and puts to use skills he has honed through years of experience managing high-stakes projects for a range of industry-leading companies.

He has a strong background in data analysis, compliance, and communication, which allows him to support LA Times Compare through fact-checking in an effort to provide up-to-date and factual information across our content.

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