The Federal Reserve has hiked interest rates 10 consecutive times since March 2022. And that’s lead to some savings accounts paying yields that are higher than they’ve been in over a decade: Both Upgrade and UFB Direct are paying 4.81% APY, and Bask Bank 4.75% APY, just to name a few of the higher paying high-yield savings accounts. You can see some of the highest-paying savings accounts here.
“There are plenty of savings accounts that pay well above the averages, so it’s best to shop around for an account that not only pays a high interest rate, but also has other features you may be looking for, such as convenient customer service options,” says Chanelle Bessette, banking specialist at NerdWallet.
Greg McBride, chief financial analyst at Bankrate, notes that while “the goal is to earn as many dollars of interest as possible,” you also want to ensure you go with an account that is FDIC-insured and doesn’t have too many hoops to jump through. “Look beyond the eye-popping APY to understand what limitations there are to earning high yields. Most accounts paying 4% to 7% only do so up to a limit, often just your first $1,000 in the account,” he says. (You can see the highest savings account rates you may get now here.)
The latest average savings rates
Below are the latest average rates on savings accounts, according to data from Bankrate released on May 24. While these rates are low, you can earn far more if you shop around (you can see the highest savings account rates you may get now here.)
| Account | Average rate paid |
| Money Market Account | 0.53% |
| Savings $10K | 0.25% |
| Savings $25K | 0.50% |
| Savings $50K | 0.50% |
| Higher Yielding Savings Accounts | 1.46% |
How much savings should you have?
While inflation is showing signs of easing, it is still stubbornly high. “If we’re in a rising rate environment, it makes sense to have funds in a high-yield savings account or money market fund, which will adjust to the increase in rates,” says certified financial planner Danielle Harrison at Harrison Financial Planning.
Pros recommend having anywhere from 3-12 months worth of essential income in an emergency fund, though there’s no one-size-fits-all number — something Suze Orman said recently. Dual-income, married couples working in different fields might need less money in an emergency fund than a single earner, for example.
It’s also possible you could benefit from having additional accounts where you save for short-term goals, like buying a home in the next six months, or taking a vacation in the near future.
As for the best place to keep these funds, McBride says, “A high-yielding savings account is the perfect place for your emergency fund — accessible but just far enough out of reach that you’re less tempted to raid it for discretionary spending.” (You can see the highest savings account rates you may get now here.)
Savings accounts vs. MMAs
Regardless of whether you put your money in a traditional savings account or a money market account (MMA), paying attention to interest rates can determine how much free money you’ll earn.
Savings accounts are popular because of their flexibility, ease of saving, the opportunity to earn interest and the safety of FDIC insurance. The drawbacks of saving in high-yield savings accounts include withdrawal limits that incur fees when you’ve exceeded the maximum number of withdrawals in a month.
MMAs are savings accounts with added features like debiting and check-writing, in addition to having higher interest rates than traditional savings accounts. MMAs often have higher minimum balance requirements compared to high-yield savings accounts, and they can also have subpar interest rates. If spending directly from a savings account is a feature you require, a MMA offers decent rates with the flexibility of writing checks or using a debit card attached to the account.
No matter the type of account you open, pros recommend reading the fine print, making sure you have the protection of federal deposit insurance and that you’re able to meet any balance requirements to avoid monthly fees. You should also ensure you can meet any direct deposit or monthly transaction requirements to get that higher yield. Check to see how easily you can get money into and out of the account when needed and be sure to compare the interest rates and terms to ensure you’re getting the best deal. (You can see the highest savings account rates you may get now here.)
