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Savings Account Rates Have Surged to a 𝓀𓃲Record Peak

If you're working on creating an emergency fund that can help you weather financial surprises, you're in luck. That's because this is a historically remarkable time for savings account rates. Due to decades-high inflation, the 澳洲幸运5官方开奖结果体彩网:Federal Reserve raised its federal funds rate 11 times between March 2022 and July 2023. That aggressive rate-hike campaign, in turn, pushed banks and credit unions to dramatically raise their rates ♑on savings, money market, and CD accounts.

As a result, the top 澳洲幸运5官方开奖结果体彩网:annual percentage yield (APY) on a nationwide savings account skyrocketed to 5.55% in April. It's estimated this was the highest nationally available savings account rate in 20-plus years, given that the 澳洲幸运5官方开奖结果体彩网:federal funds rate has not been this high since 2001.

How Mucꦦh Can I Earn With a High-Yield Savings Account?

The amount of interest you can collect on your savings varies wildly, depending on how much you shop around and whether you're willing to open a 澳洲幸运5官方开奖结果体彩网:high-yield savings account somewhere other than your primary bank.

The current national average rate for savings accounts is a paltry 0.45% APY, according to the latest data published by the FDIC. With a rate like that, you won't earn much. In fact, a $5,000 deposit held at that rate for six full months will only earn $11 in interest.

Fortunately, it's easy to earn 10 to 12 times more than the national average with one of today's top-paying, high-yield savings accounts. Beyond the nation-leading rate of 5.55% APY, another 13 options in our daily ranking 澳洲幸运5官方开奖结果体彩网:pay 5.25% APY or better. That g🌳ives you a broad selection of banks and accounts to fi♊nd an option with features and required minimums that suit your needs.

So how much can you earn with a $5,000 deposit? Below, you can see how your earnings will vary at different interest rates. The earnings below represent six months, so if you earn that rate for longer, your total earnings will be even higher.

If your emergency fund is beyond the $5,000 level and you're working on a much higher goal, you stand to earn even more from today's top savings account rates. Again, the table below represents six months of earnings at each rate, with longer durations leading to bigger earnings gains.

How L𓂃ong Will Savings Account Rates Stay This High?

The Federal Reserve is currently in a holding pattern on its federal funds rate, watching to see if 澳洲幸运5官方开奖结果体彩网:inflation comes down sufficiently and sustainably. Until it feels confident this is happening, the Fed has said it won't be ready to lower rates. As long as its benchmark rate stays steady, savings account rates are also expected to continue their record-high.൲

At some point, however, the Fed will decide to make a rate cut. At this time, the CME Group's FedWatch tool shows that only about 10% of fed funds futures traders predict the Fed will make a first rate decrease at the July 31 meeting. But by the Sept. 18 meeting announcement, about two-thirds of traders are betting on a rate cut. Whether that aligns with what the Fed ultimately 🐻does remain🅠s to be seen, as the committee will make each rate decision meeting-by-meeting based on the freshest economic data.

Lock in a Record Rate by Adding a CD

Though the Fed's timeline is uncertain, it's a reasonable assumption that it will begin lowering interest rates sometime in 2024 or 2025. But this doesn't mean you're completely at the mercy of the Fed when it comes to how much you can earn on your cash savings.

One way to protect yourself against future rate decreases is to commit a portion of your savings to a 澳洲幸运5官方开奖结果体彩网:certificate of deposit (CD). Though CDs require committing your funds f🐠or the🐎 duration of the CD term, the payoff is that your rate is locked and guaranteed for the full length of the CD—no matter what happens with the Federal Reserve and interest rates.

For an emergency fund, you won't want to lock up a majority of your funds in a CD. However, you could consider a short-term certificate for a portion of your emergency fund, making sure you have an ample cash reserve in an accessible savings account should a financial emergency arise. Today's top nationwide CD is paying 6.00% APY for 10 months, but there are more than a dozen options in 澳洲幸运5官方开奖结果体彩网:our daily ranking of the best CDs paying at least 5.40% APY on terms upꦰ to 12 months.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not eღx🎐ceed $25,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, 澳洲幸运5官方开奖结果体彩网:read our full methodology.