High-Yield Savings Rates May Be Falling, but Experts Are Still Sticking to This Account. Today’s Savings Rates, Dec. 23, 2024

As the year approaches, Best High Yield Savings Accounts Still helps you earn nearly 5% APY in savings. That could change soon as the Federal Reserve votes to lower interest rates. Typically, when the Fed lowers the federal funds rate, banks also lower their savings rates.

Opening a HYSA is still a smart way to earn more interest on funds you need easy access to, such as an emergency fund.

“Even if rates start to come down, HYSA’s rates are still pretty good,” said Danielle Floresis a CNET finance expert and the founder of I Like to Dabble. “I signed up for HYSA last month and the interest rate was 4.1%, which dropped to 3.9% last week and I’m still making decent money on my balance.”

Here’s the latest news on savings rates and what you need to know about opening a HYSA.

Experts recommend comparing interest rates before opening a savings account to get the best possible APR. Enter your message below to get the best prices in your area from CNET partners.

Why high-yield savings accounts are better than traditional savings accounts

Even though the interest rate is down from last year’s record high of 6%, Flores still recommends that you put the HYSA funds you’ve already saved into a HYSA.

Even as interest rates drop, you can still earn more than you would with a traditional savings account, which often gives you pennies on the dollar for your hard-earned savings. For example, if you make a one-time deposit of $500 into a HYSA, which currently has an annual interest rate of 4% and the interest rate does not change over the next six months, you will earn approximately $10 in interest. However, if you put your money in a traditional savings account that earns 0.01% APR, you’ll earn 2 cents on the dollar over the same time period.

The $10 you earn by depositing money into a HYSA may not seem like much, but every dollar helps achieve your savings goals.

How to choose the best high-yield savings account for your savings needs

While high interest rates are still around, it doesn’t hurt to shop around for better rates to see if you can earn more interest. Experts still recommend comparing annually to get better prices, deals, and fees. Here are some things to note:

• Minimum deposit requirements: Some HYSAs require a minimum amount to open an account, usually between $25 and $100. Others don’t need anything.
• ATM deposits and withdrawals: Not every bank offers cash deposits and withdrawals. If you need to use an ATM regularly, check to see if your bank offers ATM fee reimbursement or a variety of in-network ATMs, says Lanesha Mohip, founder of Polished CFO and a member of CNET’s Expert Review Board.
• cost: Be aware of the fees for monthly maintenance, withdrawals and paper statements, Mohip said. These fees drain your balance.
• Auxiliary functions: If you prefer face-to-face help, look for a bank with physical branches. If you’d rather manage your money digitally, consider online banking.
• Withdrawal limits: Some banks charge an excess withdrawal fee if you make monthly withdrawals for more than six months. If you think you might need to make more money, consider a bank that doesn’t have this restriction.
• Federal Deposit Insurance: Make sure your bank or credit union is insured through the FDIC or NCUA. This way, if a bank fails, up to $250,000 per account holder and per category of funds is protected.
• Customer Service: Choose a bank that is responsive and makes it easy to get account assistance when you need it. Read online customer reviews and contact the bank’s customer service to get an idea of ​​what it’s like to work with the bank.

methodology

CNET reviewed savings accounts at more than 50 traditional and online banks, credit unions and financial institutions offering services nationwide. Each account has a score between 1 (lowest) and 5 (highest). The savings accounts listed here are insured by the FDIC or NCUA up to $250,000 per person, per account category, and per institution.

CNET evaluates the best savings accounts using a set of established criteria that compare annual yield, monthly fees, minimum deposits or balances and access to physical branches. None of the banks on our list charge monthly maintenance fees. Accounts that offer any of the following benefits will be ranked higher:

• Account bonus
• Automatic saving function
• Wealth Management Consulting/Counseling Services
• cash deposit
• Extensive ATM network and/or ATM rebates used at out-of-network ATMs

If a savings account doesn’t have an easy-to-navigate website or doesn’t offer useful features like an ATM card, it may be rated lower. Accounts that impose restrictive residency requirements or fees for exceeding monthly transaction limits may also be rated lower.

*APY as of December 20, 2024, based on banks we track at CNET. Weekly percentage increase/decrease between December 9, 2024 and December 16, 2024.

**Varo only offers 5% APY on balances under $5,000

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