Best savings accounts of January 2025

• How Bankrate calculates the national average

  In June 2023, Bankrate updated its methodology that determines the national average savings account rates. More than 500 banks and credit unions are surveyed to generate weekly national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks. 

Ask the experts: Where are savings rates headed in 2025?

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  Sarah Foster

• 

  Thomas Brock

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  Beverly Harzog

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Sarah Foster

Principal U.S. Economy and Federal Reserve Reporter

As the U.S. economy slows and the strength of the job market hangs in the balance, the next phase for the Federal Reserve will be figuring out how much longer they should be slamming the brakes on the financial system. The way they answer that question will have a direct line to the rate consumers earn on their deposits, but the Fed is multiple rate cuts away from forcing savers to kiss their competitive yields goodbye.

Thomas Brock

CFA, CPA, Expert Reviewer

After a series of downward trending inflation readings, speculation around whether the Federal Reserve will cut the federal funds rate, which currently sits at a range of 5.25 percent to 5.50 percent, is running high. I think a slowly cooling labor market and the fact year-over-year inflation is still at 2.9 percent takes any aggressive monetary easing action off the table for the balance of 2024. That said, if inflation continues to trend downward and the labor market holds relatively firm, a 25-basis point cut could be in the cards for the last four months of the year. Following the presidential election, assuming economic strength persists and market volatility remains muted, two to four 25-basis point cuts are possible in 2025.

Beverly Harzog

Credit Cards and Loans Expert

The Fed cut interest rates in the past few months, so we’ve already seen a decline in rates for high-yield savings accounts and CDs. In 2025, we’ll see rates go down a little more. But the rates are still decent, so if you plan to put money in a CD or a HYSA, do it sooner rather than later so you benefit before the rates go down any further.

• Finding a competitive yield

  You want to make sure you’re earning a competitive yield that’s a lot higher than the national average. You’re even able to outpace inflation with a top savings yield in 2024.

• Not paying monthly service fees

  Paying fees cuts into any interest you’re earning. You don’t want any fees to take away from your savings account balance.

• Being able to access your money in an emergency

  Savings accounts are ideal for an emergency fund because most provide easy access to your funds when you need them.

Available from banks and credit unions, savings accounts earn a variable yield, and you can typically withdraw money anytime without incurring a penalty.

What is needed to open a savings account?

Whether opening an account online or in a bank or credit union, you'll likely be asked for similar information.

Learn more

• Is my money safe in a savings account?

  Money deposited in a savings account at an FDIC-insured bank, or at an NCUA-insured credit union, is safe as long as you are within FDIC or NCUA limits and following their guidelines.
  
  The standard FDIC deposit insurance amount is $250,000 per depositor, per FDIC-insured bank, per ownership category.

  You can use the FDIC’s Electronic Deposit Insurance Estimator (EDIE) to make sure your accounts are within FDIC limits. This tool relies on the information that you provide. The FDIC also has a phone number, (877) ASK-FDIC, that you can call to ask questions. 

  The FDIC Bank Find tool is how you can verify your bank is an FDIC-insured bank, or you can call the FDIC’s phone number (877-275-3342) for assistance. 

  At NCUA credit unions, the standard share insurance amount is also $250,000 per share owner, per insured credit union, for each account ownership category.

• Should I have more than one savings account?

  How many accounts you should have will vary. Though some savers are better off keeping all their funds in one account, others may benefit from having multiple savings accounts for different goals.  Some savings accounts allow you to designate portions of your money into different buckets devoted to spending categories, such as for your emergency fund or vacation fund. And some banks help by encouraging customers to create multiple accounts for specific saving purposes.

  Regardless of how many accounts you decide to open, it pays to avoid accounts with monthly maintenance fees or minimum account balance requirements that may result in fees.

• Do I have to pay taxes on my savings account?

  Generally, any interest you earn on a savings account is considered taxable income. Even if you don’t receive a 1099-INT tax form because the amount of interest you’ve earned for the year is small (less than $10), you’re still expected to include the earned interest on your tax return. The IRS considers any interest earned on a savings account to be taxable. If you earn interest from your savings account, you'll be required to submit a 1099-INT form to the IRS.

  If you’re concerned about your tax liability and you’re saving for a long-term goal, consider keeping your extra funds in a different type of savings or investment vehicle. Money you’re setting aside for your kids’ college fund, for example, can be saved in a 529 plan where it grows tax-free. The savings in that account won’t be taxable, either, when your child’s ready to withdraw them to pay for tuition. Qualified withdrawals for education expenses from a 529 account are not taxable.

• How often do interest rates on savings accounts change?

  Savings rates are usually variable, which means banks can change them whenever they choose. Banks’ business needs, as well as competition for deposits, play a role in where banks set savings rates, while regulation plays a part as well.

  Savings-account yields closely follow the federal funds rate, which is the interest rate banks charge each other for overnight loans and is guided by the Federal Reserve. In recent years, top-yielding banks have raised savings rates in response to Fed rate hikes.

  The best savings accounts are federally insured. Money deposited in savings and money market accounts at an FDIC bank or NCUA credit union is safe and insured for up to at least $250,000 by either the FDIC or NCUA.

• How much money does the average person have in savings?

  Nearly 6 in 10 (59 percent) U.S. adults are uncomfortable with their level of emergency savings, according to Bankrate’s June Emergency Savings Report.

  The Federal Reserve's October 2023 survey of consumer finances, the latest available, found that the median value of the American family's transaction accounts (savings, checking, money market, prepaid debit cards, call accounts) is $8,000.

  A savings account can help you weather unexpected expenses, such as job loss, medical bills resulting from sudden illness, or unforeseen home or automobile repairs. Savings can also help you achieve financial goals, such as purchasing a home. If you start saving now — or add to existing savings — you’ll be better positioned to reach your financial goals even if they change.

• Why do online banks pay more interest?

  In some cases, the biggest banks still pay their savings account customers less than today's national average APY of 0.56. Online banks, on the other hand, typically pay much more because they don’t have the costs associated with maintaining branches, giving them the opportunity to pay customers higher yields. Though online banks offer higher savings rates and charge fewer fees than traditional banks, consumers should also consider their personal financial needs when deciding where to open an account, such as the need or desire to bank in person at a branch.

• Banks we monitor

  Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank of America, Bank5 Connect, Barclays Bank, Bask Bank, Bethpage Federal Credit Union, BMO Alto, BMO Bank, Bread Savings, BrioDirect, Capital One, CFG Community Bank, Charles Schwab Bank, Chase Bank, CIBC Bank USA, CIT Bank, Citibank, Citizens Access, Comerica Bank, Connexus Credit Union, Credit One Bank, Customers Bank, Delta Community Credit Union, Discover Bank, EverBank, Fifth Third Bank, First Citizens Bank, First Internet Bank of Indiana, First National Bank of America, FNBO Direct, Forbright Bank, Golden 1 Credit Union, Heritage Bank, Huntington National Bank, iGOBanking.com, Jenius Bank, KeyBank, LendingClub Bank, Limelight Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Morgan Stanley Private Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, Openbank, Pentagon Federal Credit Union, PNC Bank, Popular Direct, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Rising Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, SoFi, State Employees' Credit Union, Suncoast Credit Union, Synchrony Bank, TAB Bank, UFB Direct, US Bank, USAA Bank, Varo Bank, Vio Bank, VyStar Credit Union, Wells Fargo, Zions Bank