Federal Reserve lowers federal funds rate, but high-yield savings accounts offer over 4% APY

From Yahoo Finance: 2025-03-21 06:00:00

The Federal Reserve lowered the federal funds rate, causing deposit interest rates to fall. Despite this, high-yield savings accounts still offer over 4% APY. Top accounts exceed the national average of 0.41%, with rates up to 4.40% APY from Openbank with a $500 minimum deposit. Shop around for the best rates.

Online banks offer high savings rates due to lower costs, passing savings to customers. Many top high-yield accounts have no fees or minimum requirements. Credit unions also offer competitive rates between 4-5% APY with fewer fees. They may have membership requirements, but some are open to anyone.

Savings accounts are safe with FDIC or NCUA insurance up to $250,000. While they don’t provide market returns, they’re ideal for short-term goals like down payments or emergency funds. For long-term goals like retirement, consider higher-risk market investments for better returns.

Read more: Savings interest rates today, March 21, 2025 (up to 4.40% APY return)