AOL Blog Savings interest rates today: Bank smarter and grow your money faster at up to 5.25% APY right now — Oct. 24, 2024

A major disadvantage of an everyday savings account is yields that average 0.45% on your balance — not enough to keep rising costs and inflation from eating into your wealth. Yet you can still find high-yield accounts paying out more than 5% APY right now, offering a way to supercharge your savings up to 10 times faster than at your neighborhood bank. Today's most competitive savings rates are at FDIC-insured online banks and digital accounts that allow for flexible access to your money while paying out up to 5.25%. And there's no catch: Without the overhead of branches and staff, these modern banks can afford to pass along higher yields without the fees, minimums or withdrawal penalties that can eat into your earning potential. And online banking and smartphone apps make it easy to move, monitor and manage your money with flexible access, no matter where you bank. Yet with the Fed expected to make additional rate cuts next month, it's a smart time to upgrade from simple savings. Here's where to find the best APYs on high-powered accounts to support your everyday banking, get you to your financial goals and maximize your savings — backed by the power of compounding. 💰 Today's best CDs: Final call on rates of up to 4.70% APY for guaranteed savings into 2025 High-yield savings rates for October 24, 2024 Today’s highest savings rates are at FDIC-insured digital banks and online accounts paying out rates of up to 5.25% APY with no minimums at Patriot Bank, Peak Bank and other trusted providers as of Thursday, October 24, 2024. These digital accounts and online-only banks may not be familiar as American Express, Capital One or Discover, though each partners with an FDIC-insured bank to offer deposit accounts that are insured for up to $250,000 by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA) — just like those at your neighborhood bank. And while the Federal Reserve once limited transactions and withdrawals from high-yield savings accounts to six a month, that limitation is permanently suspended in the wake of the pandemic, with many banks no longer restricting how often you can move money in and out of your account. Dig deeper: How to find and open a high-yield savings account in 5 steps Traditional savings account rates The Federal Deposit Insurance Corporation tracks monthly average interest rates paid on savings and other deposit accounts, like certificates of deposit, that offer insight into the interest you might receive at your local bank or on traditional accounts. Here's how FDIC national deposit rates on a $10,000 minimum deposit compare between September and October 2024 on traditional low-interest deposit accounts. Pulling back on average rate updates over the past year shows minimal movement for traditional savings accounts with bigger movement on 12-month CD terms. The FDIC is an independent government agency charged with maintaining stability and public confidence in the U.S. financial system and providing insurance on consumer deposit accounts. What is a savings account? A savings account is a type of deposit account designed for storing money you don’t expect to use for regular expenses, like paying bills or buying groceries. These accounts don't typically offer check-writing privileges or debit cards, though you can find limited checking with a high-yield money market account.  Saving accounts earn you interest on your balance — anywhere from a modest 1% APY with a traditional account to a lucrative 4% APY and higher for high-yield accounts — compounding what you earn and helping your savings to grow faster. Simple interest vs. compound interest Simple interest refers to the interest you earn on your principal balance only. Let's say you invest $10,000 into an account that pays 3% in simple interest. After three years, you’d have earned $900 in interest — $300 each year — for a total of $10,900 in your account. Now let's say you invest $10,000 in an account that pays 3% compounded annually. At the end of the first year, you'd have earned $300 in interest, for a total of $10,300 in your account. If you left your account as is for another year, you’d have earned another $309 in interest — $300 on your initial deposit and another $9 on the interest reinvested from year one — for a new total of $10,609. Year three, you’d earn another $318.27 in interest — $300 on your initial deposit and another $18.27 on the interest you earned. At the end of the same three years, you'd have earned $927.27 in interest for a total of $10,927.27 in your account — and that's without additional contributions to that initial $10,000. Savings accounts can compound daily, monthly or quarterly, depending on the bank and account. The more frequent the compounding, the more you can earn — so read your account's disclosure statements to understand how often your interest is compounded and credited to your account. Larger balances over longer periods can add up to even more significant savings. Compounding and crediting disclosure for Capital One 360 Performance SavingsCapital One Dig deeper: What is compound interest? How compounding works to turn time into money High-yield savings accounts vs. traditional savings accounts: What's the difference? There’s no official definition for either of these accounts. Rather, each is a type of deposit account that can earn you incremental interest on your balance, helping you to grow your savings. The money you save in these accounts is federally insured up to $250,000 by the FDIC or the NCUA for up to $250,000 per person, per account, protecting your nest egg against risk. Your earning potential is the most important difference between an HYSA and a traditional savings account. A high-yield savings account can earn you significantly more interest than a traditional savings account, with digital banks and online accounts offering the strongest rates, passing along overhead savings in the form of high yields — more than 10 times the national average when compared to a traditional account. The best of these digital banks and online accounts come with no fees and no minimum deposits — like SoFi Checking and Savings that pays up to 4.30% APY — removing any challenges to maintaining your account over the long term. Dig deeper: High-yield savings vs. traditional savings account: Why it’s worth the switch How to compare the best savings accounts Digital banking opens up more competitive rates and fewer fees than your neighborhood brick-and-mortar bank, and robust apps make it easy to keep an eye on your balance, manage money among everyday accounts and deposit checks from your smartphone or tablet. Yet while it's tempting to choose an account based only on its highest advertised APY, interest rates on savings accounts are variable — meaning rates can fluctuate after you open one and change over time. And you could be earning a lower rate if the Fed cuts its benchmark interest rate later this year. Instead, look for an account that fits the way you like to bank, weighing factors that include: Promotional rates. Today's high-yield accounts can earn 4% APY and higher. Yet some accounts advertise promotional or limited-time rates to entice you to sign up before adjusting to a lower rate based on market conditions. Low or no minimums. The best savings accounts require no minimum deposit or balance to earn interest, though you might be required to open with a minimum deposit or maintain a specific monthly balance to avoid monthly maintenance or service fees. Ease of accessing your money. Look for flexibility that includes ATMs and mobile apps that accept checks for deposit — or branch access, if you prefer in-person banking. FDIC or NCUA protections. Savings accounts are federally insured for up to $250,000 per account, per person — which means your money is safe up to the limit. Dig deeper: Can you lose money in a high-yield account? It's unlikely, but here's what to watch out for Other deposit accounts to save and grow your money A savings account can offer flexible access to your money, but it isn’t the only safe place to store your savings and earn interest on your balance. Look to these alternatives that offer steady returns at APYs that can outpace traditional accounts. Certificate of deposit. A CD guarantees a high fixed rate of return on a principal deposit at the end of an agreed-on term. CDs differ from savings accounts in that you risk a withdrawal penalty if you need to access your money before the CD matures — though a short-term CD ladder can help you leverage today's strongest rates with flexible, rolling returns into next year or longer. Money market account. Also called a money market savings account, the rate on an MMA can beat those of traditional savings accounts, with the same access to your money. High-yield checking account. A high-yield checking account is like a money market account in that it combines high APYs with checking benefits, but with unlimited debit and check-writing privileges you won't find with an HYSA or MMA. Dig deeper: HYSA vs. money market account: Which high-APY account is best for your nest egg? Savings rates and high-interest accounts in the news Savings rates strongly correlate with the target interest rate set by the Federal Reserve, the country’s central bank. This Fed rate is the benchmark that affects interest rates set for deposit accounts, loans, mortgages, credit cards and other financial products. As the Fed rate rises, so do APYs on savings accounts, CDs and money market accounts — with today’s rates on the best high-yield savings accounts topping 4% APY. After increasing the target interest rate 11 times from March 2022 to July 2023 in an effort to combat the highest inflation in four decades coming out of the pandemic, the Federal Reserve announced a highly anticipated half-point cut to its federal funds target interest rate after its September 2024 policy meeti