The Federal Reserve just made its first interest rate cut in over four years, reducing the federal funds rate by 0.05%. With savings account rates expected to follow suit, now’s the time to revisit where you’re stashing your money.
Currently, you can open a high-yield savings account with an APY as high as 5.30% and 5.00% or more for a six-month certificate of deposit. If you’re working on growing your savings, now is the time to take advantage of higher rates.
APYs among the top-paying banks that CNET tracks have started to decline amid talk of rate cuts, but you can still find competitive savings rates paying more than 11 times more than the national average. We’ll walk you through the highest savings and CD rates below, and offer advice about how to save more even as rates continue to fall.
Read more: Borrowers and Savers, Listen Up. Here’s Why You Should Care About Today’s Interest Rate Cut
The best savings rates this week
This week, the average savings rate is 4.80% based on the high-yield savings accounts we track at CNET. Below are a few of the highest savings rates available this week.
| Bank | APY | Minimum deposit |
| LendingClub | 5.30% | $0 |
| My Banking Direct | 5.25% | $500 |
| Newtek Bank | 5.25% | $0 |
| UFB Direct | 5.15% | $0 |
| Bask Bank | 5.10% | $0 |
| BMO Alto | 5.10% | $0 |
| Bread Savings | 5.10% | $100 |
| EverBank | 5.05% | $0 |
| Tab Bank | 4.40% | $0 |
The best CD rates this week
Regardless of the CD terms -- the amount of time your savings are held -- the average CD rates across all banks are barely over 1% based on data from the Federal Deposit Insurance Corporation. This average includes rates from major national banks, which have much lower APYs than online banks. The average CD rates for CNET’s top picks are as high as 4.55%.
| 6-month | 1-year | 3-year | 5-year | |
| FDIC | 1.81% | 1.88% | 1.43% | 1.42% |
| CNET | 4.50% | 4.55% | 3.82% | 3.69% |
Here are the best CD rates by term this week:
6-month
- America First Credit Union: 5.10%
- Barclays: 5.10%
- Quontic: 5.10%
1-year
- CommunityWide Federal Credit Union: 5.00%
- Limelight Bank: 5.00%
- Connexus Credit Union: 4.91%
3-year
- First Internet Bank of Indiana: 4.19%
- MYSB Direct: 4.16%
- Synchrony: 4.15%
5-year
- BMO Alto: 4.10%
- First Internet Bank of Indiana: 4.09%
- Alliant Credit Union: 4.00%
Read more: Now’s a Good Time to Earn More Interest on Your Money. Here are 8 Ways to Start
Should you open a savings account or a CD?
Experts routinely suggest building an emergency fund with three to six months of expenses to help in case you experience a job loss, if your childcare expenses rise or if you run into an unexpected expense.
How much should you set aside and where should you store it? It depends on your financial situation, experts say. For instance, if you’re worried about a layoff, now may be the time to contribute more to your emergency fund in a high-yield savings account. If you’re inching closer to retirement, a CD with a solid APY can help you earn more on extra cash while guaranteeing your rate for the entire term -- but we recommend maxing out contributions to a 401(k) or IRA first. Here’s how to choose.
Given the unpredictability of what’s next economically, a high-yield savings account can be a good fit for your emergency fund since you’ll have the flexibility to transfer money when you need it. High-yield savings accounts are also ideal for sinking funds if you’re planning a vacation or wedding or saving for a big purchase -- such as a new phone or large furniture purchase. It’s also a good tool to help you get into the habit of saving by setting up automatic transfers to move money each time you get paid.
Most high-yield savings accounts that offer the best APY and banking services are neobanks or online-only banks. This means you’ll likely need to manage your savings online in exchange for higher rates.
If you’ve already built an emergency fund, consider longer-term options to earn more interest over time, like CDs and treasury bills. You’ll lock in a fixed rate -- regardless of what happens in the economy -- and you’ll earn a guaranteed fixed return when the term ends. For instance, if you have an extra $1,000 set aside to buy a home, placing the money in a CD can help you earn a higher, guaranteed rate, compared to a high-yield savings account that may drop if the economy begins to slow.
Since CDs have attractive rates right now -- some as high as 5.00% -- building a CD ladder can help you take advantage of high APYs, while remaining flexible. To create a CD ladder, you’ll open multiple CDs and stagger the terms to take advantage of better rates. This way you’ll have money coming due to you more frequently.
For example, instead of locking up your money in a five-year CD, you might split your savings across one-, two-, three- and five-year CDs. This way some of your money frees up in as little as one year, and you can decide to withdraw those funds or reinvest into a new CD.
If there’s a chance you’ll need the funds sooner, consider a no-penalty CD or a high-yield savings account to avoid a withdrawal penalty. CDs and treasury bills come with early withdrawal penalties if you need to access your funds before the term expires.
Read more: Are CDs Worth It?
Tips to save more amid inflation
Although inflation continues to cool, many are still struggling with higher prices for groceries, gas and housing. There may not be much room left in your budget for saving, so opening an account to deposit a few bucks might seem pointless.
Every penny helps -- whether you’re working toward building your emergency fund goal or planning to buy a new car. You may be able to put more toward saving by auditing what you’re spending, said Bobbi Rebell, a certified financial planner and author of Launching Financial Grownups.
If you’re wondering how to grow an emergency fund or set more money aside without taking on a side hustle or second job, here are a few simple ways to save on expenses:
- Look at what you’re spending regularly. It’s hard to see if there’s room in your budget to cut back if you’re not sure where your money goes each month. Examine the money coming into your accounts each month and break down the money going out into categories, like rent, bills, subscriptions and food. You may find you’re spending more than you realized in an area that you can cut back on.
- Review your phone plan. Are you paying too much for your cellphone bill? See if you’re on the best phone plan for your entire family. You may save more by downgrading your plan or setting up automatic payments for a discount.
- Evaluate streaming services and cable. You may be able to cancel streaming services that you rarely use. Or you may no longer need premium channels that you use for your kids or a show that’s ended. And be sure to review all the perks available with your credit cards or phone plan -- some cards and phone carriers offer free or reduced streaming service subscriptions.
- Look at your pantry and fridge. Take a close look at your family’s eating habits and budget. Is there any food you regularly throw out that you can cut back on buying? Or, if there are items you go through quickly, consider buying in bulk to save money. You might also switch to store brands, which can help you save as much as 40% depending on your grocery spread.
- Make more meals at home. Visiting your favorite restaurant or summing food via a delivery app is convenient but it’s costing you extra. One 2023 estimate showed the cost to be as much as 50% – 75% more than preparing meals at home. If your food bill is a cause for concern, cut back on eating out and keep more of your hard-earned dollars.
- Sell gently used items. You may be able to make a few extra dollars by selling clothes that you no longer need or toys your kids have outgrown. You can also get rid of exercise equipment, furniture, appliances and home decor items on sites such as Facebook Marketplace, Merari, Craigslist, ThredUp and eBay. If you need something new, consider shopping second-hand to save more money, so you can continue adding to your savings.
Realistically, these tips may not add up to a fortune, but they can help you save a little more each week, to help you inch closer to your savings goals. For example, if you’re working toward a $1,000 emergency fund, you may be able to set aside an additional $75 to $100 by cutting expenses or selling items in a few weeks. The savings may not seem like much at first, but if you can save $100 a month, in a year’s time, you’ll have $1,200 for your emergency fund -- plus any interest that accrues in your account.
FAQs
The best CD rate depends on your bank and term. Most high-yield CDs earn APYs between 4.00% and 5.00% right now. Experts advise remaining flexible by keeping your money in an account that doesn’t charge an early withdrawal penalty, so you can easily access your funds if you need them. A high-yield savings account or no-penalty CD works best in this case.
Some banks change savings rates weekly or twice a month, while others don’t change their rates as frequently. CNET tracks savings and CD rates weekly to keep you up to speed.
There’s no harm in having multiple savings accounts, but it’s best to think about the goal for each open account. For instance, you may have one account for your emergency fund and a separate account for your future home.
Before opening multiple accounts, look for banking features like “spending buckets” or groups to organize your savings for different goals in one account. You should also pay attention to any minimum balance requirements for the accounts to make sure you’re not paying any fees, if applicable.