Federal Reserve cuts target rate, causing savings interest rates to fall, but some accounts offer 4.3% APY.

From Yahoo Finance: 2025-06-14 06:00:00

The Federal Reserve has cut its target rate three times in late 2024, causing savings interest rates to fall. It’s crucial to ensure you’re getting the best rate possible when looking for a savings account. The national average savings account rate is currently at 0.42%, a significant increase from 0.06% three years ago. Some of the best savings accounts on the market today offer 4% APY and higher, with the highest rate available being 4.3% APY from EverBank and Openbank. The amount of interest you can earn from a savings account depends on the annual percentage rate (APY), which considers the base interest rate and how often interest compounds. For example, if you deposit $1,000 in a savings account with an average interest rate of 0.42% with daily compounding, your balance would grow to $1,004.12 after one year. Choosing a high-yield savings account with 4% APY would result in a balance of $1,040.81 after one year, including $40.81 in interest. The more you deposit in a savings account, the more you stand to earn. For instance, with a $10,000 deposit in a high-yield savings account at 4% APY, your total balance after one year would be $10,408.08, meaning you’d earn $408.08 in interest.

Read more: Best high-yield savings interest rates today, June 14, 2025 (earn up to 4.3% APY)