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What is a good interest rate for a savings account?
This question is about savings accounts.
It can be difficult to know if you're getting a good interest rate on your savings account. Today, the best savings accounts pay 5% or more. But these high rates may not last.
Currently, the average savings account interest rate is just 0.47% APY, according to the FDIC.
Technically, you'll get a good savings account interest rate if you have a rate above the national average of 0.47%. But let's be honest: that's still very low compared to the best plans.
Our rule of thumb is that to be considered as having a “good” savings account interest rate, you should be within 10% of prime interest rates. Since banks change their interest rates frequently, it can be difficult to always stay on top (and you don't want to change banks every month).
Instead, your goal should simply be to find a bank that is consistently at the top of the interest rate list – in good times and bad.
How to find a good interest rate for your savings account
How do you find that magical bank that always has a good interest rate on your savings account? Luckily for you, our team here regularly reviews the top banks and we've included them in our list here: Best High Interest Savings Accounts.
These banks currently offer the highest interest rates – and we're ranking our list in order of best interest rates. No gimmicks like you see on some websites (example in screenshot below).
You will find some lower rates at the top of these lists because they are sponsored or large advertisers. Sometimes these banks even pay companies to be listed at the top. These big banks and companies would rather spend one-time marketing dollars than pay you higher interest on your money. Remember – this is how they afford to name stadiums!
See what this list looks like:
Screenshot from April 2, 2024
You can compare this list with ours and see that we have some of the same banks – just in the right order. We may be missing some banks, but we strive to stay ranked with the highest interest rates from banks we know and trust:
Screenshot from April 2, 2024
Why is that important? Every 1% difference in interest rates on $10,000 means $100 you don't get. This can really add up over time.
Check out our list of the best savings accounts here >>
What you should pay attention to
Some banks and investment firms use other gimmicks when offering high interest rates on their savings. For example, some banks have minimum requirements to get the highest interest rate or, even worse, maximum dollar amounts to get the highest interest rates.
For example, most high-interest checking accounts limit the balance that allows you to earn the high interest. A cap of $10,000 is very common.
Other products may charge a monthly service fee for membership to achieve the highest interest rate. For example, Robinhood offers a great cash savings program, but you must be a member of Robinhood Gold, which costs $5/month. That might not sound like much – but when you realize you're paying that monthly fee AND not even getting the highest interest rate, it doesn't make sense.
People ask too
Which bank offers 7% interest on a savings account?
Currently, there is no bank that earns 7% interest on its savings account.
Where can I get 5% interest on my savings account?
There are currently over a dozen banks that offer 5% or more interest on their savings accounts. Check out the list of 5% savings accounts here.
What is a good interest rate for a savings account?
A “good” interest rate is the highest interest rate you can earn without paying fees or dealing with minimums.
What is a really good savings rate?
Currently, the best savings account interest rates are over 5.25%.
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