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- According to the FDIC, the average savings account earns 0.42% APY, and CDs earn 0.23% to 1.83% APY.
- Online banks tend to offer higher interest rates than the average savings account.
- Keep in mind rates vary by bank and may fluctuate over time.
The Federal Deposit Insurance Corporation keeps track of interest rates offered by banks for different types of accounts.
Here are the average bank interest rates of savings accounts, CDs, money market accounts, and interest-earning checking accounts.
Current state of interest rates
The inflation rate has fallen significantly since 2022 but still hasn't reached the Fed's target of 2%. Interest rate cuts are likely on the horizon, though it's difficult to forecast when and how much they will drop. This follows several Fed rate cuts at the end of 2024; the Fed cut rates in December, November, and September for a total cut of 100 basis points, or 1.00% of interest.
When the Fed cuts its rates, savings rates fall across the board. For now, interest rates on deposit accounts remain high. That's good news for savers, who can find 5% interest savings accounts — although they're rarer than they used to be.
Average interest rates
Savings accounts
According to data from the FDIC, the average savings account interest rate is 0.42% APY but most online savings accounts pay far more than traditional bank savings accounts.
High-yield savings accounts, which work the same as a typical savings account but earn more interest, are a great way to make your money work harder.
Here are a few popular online banks that offer high-yield savings accounts and their interest rates:
| Account Name | APYs (Annual Percentage Yields) are accurate as of 01/06/2025 | Minimum Account Opening Balance |
| LendingClub LevelUp Savings Account | up to 4.75%* | $0 |
| BrioDirect High-Yield Savings Account | 4.75% | $5,000 |
| Barclays Tiered Savings | up to 4.65%** | $0 |
| Western Alliance Bank High-Yield Savings Account, powered by Raisin | 4.40% | $1 |
| Betterment Cash Reserve Account | 4.00% | $10 |
| Bread Savings High-Yield Savings Account | 4.50% | $100 |
Checking accounts
Not all checking accounts earn interest, but there are a few accounts out there that offer this perk. On average, interest-bearing checking accounts earn 0.07% APY.
Many banks offer higher rates for larger balances or qualifying activities, such as a certain number of monthly debit card transactions or recurring deposits.
Here are rates offered by a few popular interest checking accounts:
| Bank | Interest rate (Annual percentage yield) |
| Ally Spending Account | 0.10% to 0.25% |
| CIT Bank eChecking Account | 0.10% to 0.25% |
| Quontic High Interest Checking Account | 0.01% to 1.10% |
| USAA Classic Checking | 0.01% on balances of $1,000 or more |
| Axos Bank Rewards Checking | up to 3.30% |
Money market accounts
Money market accounts may earn more than savings accounts, depending on the financial institution. However, money market accounts function more like checking accounts; many come with ATM access, debit cards, and checks.
The average money market account rate is 0.66% APY, according to the FDIC.
Here are a few popular MMA rates today:
| Account Name | APYs (Annual Percentage Yields) are accurate as of 01/06/2025 | Minimum Account Opening Balance |
| UFB Portfolio Money Market | 4.01% | $0 |
| Quontic Money Market Account | 4.75% | $100 |
| Quontic Money Market Account | 4.75% | $100 |
CDs
Certificates of deposit, or CDs, are a good way to keep money growing without risk. Your money is locked away for a certain amount of time, generally ranging from one month to five years.
While taking money out before the term ends comes with an early withdrawal penalty, these accounts have the benefit of higher interest rates than typical savings accounts or money market accounts, on average.
CD rates depend on economic conditions, but they tend to be higher for longer terms. A big benefit of CDs is that once your money is deposited, the interest rate cannot change, unlike a savings or money market account.
Here's the average bank interest rate for a $10,000 CD for different term lengths, according to data from the FDIC:
| Product | Average interest rate |
| CD - 1 month | 0.23% |
| CD - 3 months | 1.50% |
| CD - 6 months | 1.65% |
| CD - 1 year | 1.83% |
| CD - 2 years | 1.52% |
| CD - 3 years | 1.33% |
| CD - 4 years | 1.24% |
| CD - 5 years | 1.32% |
Like savings and money market accounts, it's possible to find much higher interest rates than average for CDs at online banks.
Here are the current rates on several popular CDs:
| Account Name | APYs (Annual Percentage Yields) are accurate as of 01/06/2025 | Minimum Account Opening Balance |
| Ponce Bank 3 Month CD, powered by Raisin | 4.52% | $1 |
| Barclays 6 Month Online CD | 4.00% | $0 |
| Discover 1 Year CD | 4.00% | $0 |
| Sallie Mae 14 Month No-Penalty CD | 3.95% | $1 |
| Discover 18 Month CD | 3.80% | $0 |
| Bread Savings 2 Year High-Yield CD | 4.00% | $1,500 |
| mph.bank 3 Year CD | 4.38% | $1 |
How interest rates affect your money
High interest rates are great for savers, but they can be a challenge for borrowers. Taking out a mortgage to buy a house while interest rates are elevated means that you're stuck with a higher monthly payment. Alternatively, you could wait for rates to come down and keep your cash growing risk-free in a savings account or money market account.
Factors influencing bank account interest rates
Federal reserve policies
The Fed determines the interest rate banks charge each other to lend money, which in turn determines the rate banks charge their customers. When the Fed cuts its target rate, banks will typically do the same, lowering rates on both deposit accounts and loan products.
Rate changes occur at Fed meetings involving the Federal Open Market Committee, which occur at least eight times per year.
Inflation rates
The Fed makes its decisions based, in part, on inflation. When the inflation rate exceeds the Fed's 2% annual target, it may decide to raise interest rates to discourage spending, and thus, borrowing. Conversely, when inflation is too low, the Fed may lower rates to stimulate the economy.
Bank-specific factors
The average bank interest rate varies by the type of account you're considering. Depending on what account you're looking to open, there might be other factors that play into the interest rate you'll see, like the account's daily balance or opening deposit.
It's also worth noting that interest rates vary by bank. You might find that the best online banks have higher interest rates on savings accounts than the bank with a branch down the street.
How to find the best bank interest rates
Comparing accounts is important to get the best interest rate, but making sure that the account you're considering doesn't have any common bank fees that could eat into your earnings is equally important.
Interest rates for both deposit accounts, like checking and savings, and loans are constantly in flux. They can change at any moment, and the account with the highest interest rate today may not be the one with the highest interest rate next month. Do a quick search every few months to make sure your interest rate is still competitive.
While searching, make sure that the account you're interested in is either FDIC- or NCUA-insured. FDIC and NCUA insurance both keep your money safe in case your bank (for FDIC insurance) or credit union (for NCUA insurance) fails. This insurance makes deposit accounts like savings accounts very low-risk; without it, you could lose all of your money if your financial institution fails.
Fixed interest vs. variable interest
Bank accounts with variable interest
Most bank accounts, including savings accounts, high-yield checking accounts, and money market accounts, offer variable interest rates. This means that the account's interest rate can change at any time.
This can be both a good and bad thing; if the Fed raises its rates, there's a chance your savings account rate will go up along with them. But if the Fed cuts rates, or if your bank decides it's not profitable to offer a high interest rate anymore, you could end up with a significantly worse annual percentage yield, or APY, than you started with.
Variable interest rate accounts tend to have more liquidity than fixed interest accounts. Checking accounts are the most liquid, generally letting you withdraw money as frequently as you want. Both savings accounts and money market accounts generally come with withdrawal limits; for example, you might be limited to six free withdrawals a month. If you go over that limit, you'll have to pay a fee.
Bank accounts with fixed interest
Unlike traditional savings accounts, most CDs offer fixed interest. That means you're guaranteed the same interest rate for the fixed-rate CD's entire term length. For example, if you open a 6-month CD at 4.00% APY, you'll receive that interest for the entire six-month term length regardless of whether your bank raises or lowers its CD rates during that period.
In exchange, you generally aren't allowed to withdraw your money from the CD before the CD's maturity date. If you do, you'll have to pay an early withdrawal penalty. The only exception to this is no-penalty CDs, sometimes called flexible CDs, which let you withdraw money from your CD without penalty at least once before the term length is up.
Bank account interest rate FAQs
Generally, any interest rate that matches or exceeds the inflation rate is good.
Banks need to have a substantial amount of cash in order to fund loan products, and part of that comes from customer savings accounts. To encourage customers to save, financial institutions offer higher interest rates for savings accounts.
Banks typically don't budge on deposit account interest rates, but customers with very high balances or substantial assets at the institution may have luck negotiating.
Online banks reduce their costs by not operating physical branch locations. In turn, they are able to offer higher rates on checking and savings accounts to draw in customers.
If your interest rate drops, consider the cause of the interest rate change. If other banks are offering interest rates comparable to what your account used to offer, you might want to switch bank accounts. But if the Fed cuts its target federal funds rate, then most banks will follow suit, which could make it hard to find an account paying a rate comparable to your previous rate.
Editorial Note: Any opinions, analyses, reviews, or recommendations expressed in this article are the author’s alone, and have not been reviewed, approved, or otherwise endorsed by any card issuer. Read our editorial standards.
Please note: While the offers mentioned above are accurate at the time of publication, they're subject to change at any time and may have changed, or may no longer be available.
**Enrollment required.
*Earn 4.75% APY when you deposit at least $250 per month, earn 3.75% standard APY if minimum isn't met.
**Accounts with $250,000 or less will earn 4.35% APY, accounts with over $250,000 will earn 4.65% APY . Rate are determined by balance tiers and amount deposited.
***SoFi members with Direct Deposit or $5,000 or more in Qualifying Deposits during the 30-Day Evaluation Period can earn 4.00% annual percentage yield (APY) on savings balances (including Vaults) and 0.50% APY on checking balances. There is no minimum Direct Deposit amount required to qualify for the stated interest rate. Members without either Direct Deposit or Qualifying Deposits, during the 30-Day Evaluation Period will earn 1.20% APY on savings balances (including Vaults) and 0.50% APY on checking balances. Only SoFi members with direct deposit are eligible for other SoFi Plus benefits. Interest rates are variable and subject to change at any time. These rates are current as of 12/3/24. There is no minimum balance requirement. Additional information can be found at http://www.sofi.com/legal/banking-rate-sheet.
