What Is the Average Interest Rate for Savings Accounts?

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The best savings accounts aren’t merely a place to store your money -- they’re a place where your balance will get even bigger. Your deposits aren’t the only thing that affects this balance. When a bank or credit union pays interest, it helps your money grow.

Financial institutions set their own savings rates. Some pay nominal amounts that won’t really impact your bottom line, while others offer sky-high rates to attract new customers. Read on to learn about the average interest rate for savings accounts -- and, more importantly, how to beat it and get the highest rate available.

What is the average interest rate for savings accounts?

The average annual percentage yield, or APY, on savings accounts is 0.46%, according to the FDIC. However, there’s no need to settle for a savings account that pays only the national average rate. You can find accounts with APYs above 5% if you shop around, particularly at online banks.

Interest rates on savings accounts at popular big banks

The biggest banks typically don’t offer the best rates on savings accounts, primarily because they don’t need to attract new deposit accounts to fund their lending operation.

“Big banks are swimming in deposits,” said Greg McBride, CFA, chief financial analyst at Bankrate. “They’re not going to raise their rates. When they do, it’ll be in the tiniest of increments.”

Some of the major banks, such as Chase and Bank of America, may offer rates below the national average, but offer new account bonuses that make them more attractive. However, be mindful of the long-term implications. If you’re depositing tens of thousands of dollars, a higher rate over the next year can be much more valuable than the few hundred bucks you get from a welcome bonus.

Below are the entry-level savings account APYs at the biggest banks in the US. Keep in mind that some banks offer higher savings rates for customers with higher deposit and investment balances. Additionally, some may have a minimum balance requirement to avoid a monthly service fee.

Interest rates for savings accounts at online banks

Online banks offer the same services and banking products as traditional brick-and-mortar banks, except all transactions are conducted either via telephone or over the internet using laptops, smartphones or tablets. 

Online banks generally offer very competitive rates on savings accounts. Those that are federally-insured with the Federal Deposit Insurance Corporation are a safe place to store your money and have less overhead than traditional banks that operate physical branches. As such, online banks can pass savings on to customers in the form of fewer fees and higher APYs.

Here’s a sample of what popular online banks are paying on their savings accounts.