Federal Reserve cuts target rate, causing national average savings rate to rise
From Yahoo Finance: 2025-04-13 06:00:00
The Federal Reserve has cut its target rate three times in late 2024, causing savings interest rates to fall from their historic highs. The national average savings account rate is currently at 0.41%, up from 0.06% three years ago. The highest savings account rate available from partners today is 4.50% APY.
Considering opening a high-yield savings account now to take advantage of the current high rates. Interest earned from a savings account depends on the annual percentage rate (APY), which is a measure of total earnings after one year, considering the base interest rate and compounding frequency. For example, a $1,000 deposit at 0.41% interest would yield $4.11 in one year.
Opting for a high-yield savings account with 4% APY would result in a balance of $1,040.81 in one year, including $40.81 in interest. The more you deposit, the more you can earn – with a $10,000 deposit in a 4% APY account, you could earn $408.08 in interest in one year.
Read more at Yahoo Finance: Best high-yield savings interest rates today, April 13, 2025 (best accounts offering 4.50% APY)