Anyone with surplus savings in the bank can benefit from a high-yield savings account. If you have more money in the bank than you need to hold in your checking account, high-yield savings accounts offer a way to sock some of those funds away to earn an especially high annual percentage yield (APY). We track the savings account rates of over 100 banks and credit unions every weekday. While we do check the rates at big banks—including the five largest banks of Chase, Bank of America, Wells Fargo, Citi, and U.S.

Is it still a good time to open a high-yield savings account?

The listings that appear are from companies from which this website may receive compensation, which may impact how, where and in what order products appear. Not all companies, products or offers were reviewed in connection with this listing. The spring home buying season was further disrupted last month by economic uncertainty fueled by President Donald Trump’s on-again, off-again tariff policies. About one in every seven home-purchase agreements fell through last month, according to data released by Redfin on Thursday. Growing concern about the national debt impacted home borrowing rates this week.

“The strength of current yields offers savers more time to decide how to act, but yields will not defy the Fed’s cuts forever,” Kates said. Get a $50 bonus for receiving types of enterprise management systems direct deposits between $1,000 and $4,999.99. SoFi’s account is also fee-free like 60% of the banks we reviewed, offers Zelle, doesn’t limit the number of withdrawals you can make and has some great free budgeting tools. MarketWatch Guides may receive compensation from companies that appear on this page. The compensation may impact how, where and in what order products appear, but it does not influence the recommendations the editorial team provides.

What is the federal funds effective rate?

• The FOMC is made up of members of the Board of Governors, who are based in Washington, D.C., and Federal Reserve Bank presidents from around the country.
• A high-yield savings account is a savings account with a significantly higher interest rate than your average account.
• It wasn’t that long ago that the Fed was keeping the federal funds rate as low as possible as recently as the first few months of 2022, as well as buying billions of bonds each month to prop up the economy.
• A few of the banks on our list have budgeting tools, and we found EverBank’s to be arguably the best.
• Get a $50 bonus for receiving direct deposits between $1,000 and $4,999.99.
• Bankrate.com is an independent, advertising-supported publisher and comparison service.

“When our credit rating goes down, the expectation is that the cost of borrowing will increase,” said Ivory Johnson, a certified financial planner and founder of Delancey Wealth Management in Washington, D.C. Here’s a look at other stories impacting the financial advisor business. “It’s really hard to avoid the impact on consumers,” said Brian Rehling, head of global fixed income strategy at Wells Fargo Investment Institute. President Donald Trump has pledged to lower interest rates, but that decision is out of his direct control. Based on the unweighted average bid yields for all TIPS with remaining terms to maturity of more than 10 years.

In doing so, it cited the increasing burden of the federal government’s budget deficit. Republicans’ attempts to make President Donald Trump’s 2017 tax cuts permanent as part of the reconciliation package threaten to increase the federal debt by trillions of dollars. The debt downgrade put immediate pressure on bond prices, sending yields higher on Monday morning. The 30-year U.S. bond yield traded above 5% and the 10-year yield topped 4.5%, hitting key levels at a time when the economy is already showing signs of strain from President Donald Trump’s unfolding tariff policy.

Our First-Hand Experience Opening UFB Direct High-Yield Savings Account

We opened accounts with each to bring you first-hand accounts of the process. A key feature of most high-yield savings accounts is their variable APY, which means the interest rate can fluctuate with the market. While the last two years have brought much higher APYs for these accounts due to the Federal Reserve’s interest rate hikes, rates will almost inevitably go down in the future when rates are lowered.

Openbank, High-Yield Savings Account – 4.40% APY

The Federal Open Market Committee, a 12-member group of banking leaders from around the country, sets the federal funds rate and much of the Federal Reserve’s monetary policy. It meets eight times a year and sometimes makes rate changes — including increases or decreases — outside its scheduled meetings. The federal funds rate, or Fed rate, is the interest rate that U.S. banks pay one another to borrow or loan money overnight. It also affects interest rates on everyday consumer products, such as credit cards or mortgages. The Federal Reserve steers the federal funds rate into its target range primarily by changing the interest rate paid on reserve balances and the interest rate of its overnight reverse repurchase facility.

• Other factors, such as our own proprietary website rules and whether a product is offered in your area or at your self-selected credit score range, can also impact how and where products appear on this site.
• When choosing the best savings account for you, you’ll want to check the rules of the account, such as whether it limits the number of withdrawals you can make in a month, and if you’ll be assessed a monthly maintenance fee.
• Our research team also conducted first-hand research by opening accounts at each of these banks (and some others).
• You’re unlikely to find an FDIC-insured savings product that will provide a 7% interest rate.

You’re unlikely to find an FDIC-insured savings product that will provide a 7% interest rate. However, many online CDs and high-yield savings accounts offer APYs in the range of 4% to 5% or more. We always like a bank with no monthly fees and no minimum opening deposit or monthly balance requirement, and those are some of the things Discover Bank offers. Its customer service is also hassle-free, extremely helpful and available 24/7 – plus it’s fully based in the U.S. Despite economic headwinds, continuing uncertainty surrounding tariffs and recent credit downgrades, HYSAs continue to offer attractive returns above 4 percent APY, which continue to outpace inflation. Now remains an excellent time to open or maintain a HYSA, especially those with no fees, reasonable minimum deposits and flexible withdrawal options.

The FOMC sets the target rate range, and sets the Fed rate to be aligned with that target range. Interest rates interpolated from data on certain commercial paper trades settled by The Depository Trust Company. The trades represent sales of commercial paper by dealers or direct issuers to investors (that is, the offer side). The 1-, 2-, and 3-month rates are equivalent to the 30-, 60-, and 90-day dates reported on the Board’s Commercial Paper lmfx review Web page (/releases/cp/).

While the economy was technically growing again by May 2020, after the shortest recession on record, the fallout from the economic measures to cope with the Covid-19 outbreak is still being felt today. The Covid-19 pandemic would spread across the globe weeks later, leading to public health officials worldwide recommending lockdowns to stop the spread of the virus and ease hospital caseloads. Roughly 20.5 million jobs would be shed in April 2020 alone, with the unemployment rate jumping to 14.7%. So began the FOMC’s policy statement on Jan. 29, 2020, just a few days before the U.S. economy plunged into the Covid-19 recession.

We do not include the universe of companies or financial offers that may be available to you. Each bank is a business that has different needs for customer deposits, operating in its own regional market. As a result, some banks have to work harder to attract funds, such as smaller banks with names you may not be familiar with.

Home prices remain near record highs, while higher borrowing costs add to the cost of financing a home. The advisory firm expects “limited additional market impact” following the initial reactions to the Moody’s move. Though the interest rate can change, it makes sense to choose an account that is paying one of the highest rates in the country, since the higher your rate, the more interest you’ll collect every month and every year. Also, through the power of compounding, you can make interest off your interest, and the higher the APY on your account, the better. Credit card rates tend to mirror Fed tickmill forex broker review actions, so “higher for longer” would keep the average credit card rate around 20% through the rest of the year, Rossman said.

Since December 2024, the overnight lending rate has been in a range between 4.25%-4.5%. As a result, the average credit card rate is currently 20.12%, down only slightly from a record 20.79% set last summer, according to Rossman. Since mortgage rates are largely tied to Treasury yields and the economy, “30-year mortgages are going to be most closely correlated, and longer-term rates are already moving higher,” Rehling said.

Every business day, Investopedia tracks the rate data of about 100 banks and credit unions that offer high-yield savings accounts to customers nationwide. We determine daily rankings of the top-paying savings accounts first and foremost by the annual percentage yield (APY) offered. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account’s minimum initial deposit must not exceed $25,000. A money market account operates very much like a savings account, with the exception that it allows writing checks.