An important tip I’ve been giving clients recently is to review their savings accounts. Many people are still using their traditional bank savings accounts and are unaware that there are high yield savings accounts they could be using instead to earn significantly more interest.
As of June 2024 some traditional banks pay as low as .01% interest while some high yield savings accounts are paying over 5.0% according to Bankrate.com.1
You can see what high yield savings accounts are currently paying by doing an online search. But you also want to make sure the account is right for you--like what the minimum deposit amount is to get the advertised rate and that the transaction limits work for your needs. Many of these accounts are online only so you want to make sure their service model is a good fit for you as well. Also check that the bank is FDIC insured--do your research before you create an account.
These savings account interest rates have only recently gotten this high, and they can change at any time. When interest rates go down, your savings account rate will probably follow. So it’s important to take advantage of this now. But even when the rates do go down, the high yield savings account could still pay more than a traditional savings account.
1. Bankrate.com June 6, 2024, "What is the average interest rate for savings accounts"