Average Bank Account Interest Rates

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• According to the FDIC, the average savings account earns 0.45% APY, and CDs earn 0.23% to 1.85% APY.
• Online banks tend to offer higher interest rates than the average savings account.
• Keep in mind rates vary by bank and may fluctuate over time.

The Federal Deposit Insurance Corporation keeps track of interest rates offered by banks for different types of accounts.

Here are the average bank interest rates of savings accounts, CDs, money market accounts, and interest-earning checking accounts.

Current state of interest rates in 2024

The inflation rate has fallen significantly since 2022 but still hasn't reached the Fed's target of 2%. That means interest rate cuts are likely on the horizon, though it's difficult to forecast when and how much they will drop.

For now, interest rates on deposit accounts remain high. That's good news for savers, who can find several savings accounts paying a generous 5% APY (Annual Percentage Yield) or more.

Average interest rates

Savings accounts

According to data from the FDIC , the average savings account interest rate is 0.45% APY but most online savings accounts pay far more than traditional bank savings accounts.

High-yield savings accounts , which work the same as a typical savings account but earn more interest, are a great way to make your money work harder.

Here are a few popular online banks that offer high-yield savings accounts and their interest rates:

Checking accounts

Not all checking accounts earn interest, but there are a few accounts out there that offer this perk. On average, interest-bearing checking accounts earn 0.08% APY.

Many banks offer higher rates for larger balances or qualifying activities, such as a certain number of monthly debit card transactions or recurring deposits.

Here are rates offered by a few popular interest checking accounts:

Money market accounts

Money market accounts may earn more than savings accounts, depending on the financial institution. However, money market accounts function more like checking accounts; many come with ATM access, debit cards, and checks.

The average money market account rate is 0.66% APY, according to the FDIC.

Here are a few popular MMA rates today:

CDs

Certificates of deposit, or CDs , are a good way to keep money growing without risk. Your money is locked away for a certain amount of time, generally ranging from one month to five years.

While taking money out before the term ends comes with an early withdrawal penalty , these accounts have the benefit of higher interest rates than typical savings accounts or money market accounts, on average.

CD rates depend on economic conditions, but tend to be higher for longer terms. A big benefit of CDs is that once your money is deposited, the interest rate cannot change, unlike a savings or money market account.

Here's the average bank interest rate for a $10,000 CD for different term lengths, according to data from the FDIC :

Like savings and money market accounts, it's possible to find much higher interest rates than average for CDs at online banks.

Here are current rates on several popular CDs:

How interest rates affect your money

High interest rates are great for savers, but they can be a challenge for borrowers. Taking out a mortgage to buy a house, for example, while interest rates are elevated means you're stuck with a higher monthly payment. Alternatively, you could wait for rates to come down and keep your cash growing risk-free in a savings account or money market account.

Factors influencing bank account interest rates

Federal reserve policies

The Fed determines the interest rate banks charge each other to lend money, which in turn determines the rate banks charge their customers. When the Fed cuts its target rate, banks will typically do the same, lowering rates on both deposit accounts and loan products.

Rate changes occur at Fed meetings involving the Federal Open Market Committee, which occur at least eight times per year.

Inflation rates

The Fed makes its decisions based, in part, on inflation . When the inflation rate exceeds the Fed's 2% annual target, it may decide to raise interest rates to discourage spending, and thus, borrowing. Conversely, when inflation is too low, the Fed may lower rates to stimulate the economy.

Bank-specific factors

The average bank interest rate varies by the type of account you're considering. Depending on what account you're looking to open, there might be other factors that play into the interest rate you'll see, like the account's daily balance or opening deposit.

It's also worth noting that interest rates vary by bank. You might find that the best online banks have higher interest rates on savings accounts than the bank with a branch down the street.

How to find the best bank interest rates

Comparing accounts is important to get the best interest rate, but making sure that the account you're considering doesn't have any common bank fees that could eat into your earnings is equally important.

Interest rates for both deposit accounts, like checking and savings, and loans are constantly in flux. They can change at any moment, and the account with the highest interest rate today may not be the one with the highest interest rate next month. Do a quick search every few months to make sure your interest rate is still competitive.

Bank account interest rate FAQs

What is considered a good interest rate for a savings account in 2024?

Rates vary based on the economic climate, but generally anything that matches or exceeds the inflation rate is good.

Why do checking accounts typically offer lower interest rates than savings accounts?

Banks need to have a substantial amount of cash in order to fund loan products, and part of that comes from customer savings accounts. To encourage customers to save, financial institutions offer higher interest rates.

Can I negotiate a better interest rate with my bank?

Banks typically don't budge on deposit account interest rates, but customers with very high balances or substantial assets at the institution may have luck negotiating.

How do online banks tend to offer higher interest rates?

Online banks reduce their costs by not operating physical branch locations. In turn, they are able to offer higher rates on checking and savings accounts to draw in customers.

What should I do if my interest rate drops?

Consider the cause of the interest rate change. There are several factors that determine a bank's interest rate on savings products, such as high-yield accounts and CDs, including decisions by the Federal Reserve, the U.S.' banking authority. If the Fed cuts its target federal funds rate , then most banks will follow suit, which could make it hard to find an account paying a rate comparable to your previous rate.