Fall in savings interest rates due to Federal Reserve cuts; top savings accounts offer over 4%.

From Yahoo Finance: 2025-06-21 06:00:00

Savings interest rates are falling due to the Federal Reserve’s target rate cuts. The national average savings rate is currently 0.42%, significantly higher than three years ago at 0.06%. However, top savings accounts offer rates of 4% APY or more, with VIO Bank offering the highest at 4.31% APY.

The amount of interest earned in a savings account depends on the annual percentage rate (APY) and how often interest compounds. For example, a $1,000 deposit at 0.42% interest with daily compounding would yield $1,004.12 after one year. Choosing a 4% APY high-yield account would earn $40.81 in interest over the same period.

The more you deposit in a savings account, the more you can earn. For instance, a $10,000 deposit in a 4% APY account would result in a total balance of $10,408.08 after one year, earning $408.08 in interest. Ensure you are maximizing your savings potential by finding the best rates available.

Read more: Best high-yield savings interest rates today, June 21, 2025 (earn up to 4.31% APY)