Two new savings accounts have joined the "top rate" competition in the past week, both with a best-of-the-best rate of 5.25% APY. That's up from the previous nation-leading rate of 5.20% APY.

Last week, an app-only account called Milli jumped to the top of our daily ranking of the best high-yield savings accounts with its new offer of 5.25% APY. Though it has no fees and no minimums, you can only open and interact with a Milli account via mobile app. Today, Evergreen Bank Group launched a 5.25% APY account to share the🦹 crown. Its savings account is fully available via desktop computer, as well as through its banking app.

Nationwide Savings Account Rate Leaders

High-Yield Savings Accounts Are a Smart Move

Stashing some of your cash in a separate high-yield savings account is especially smart right now, as banks and credit unions are paying the highest deposit rates we've seen in 16 years or more. Instead of keeping your funds in a checking account earning nothing, or a savings account at your primary bank that 澳洲幸运5官方开奖结果体彩网:may be paying close to zero, a high-yield savings account can offer 12 times the national average rate of 0.42% APY. So it pays handsomely to shop around.

If you've never held money at more than one bank, you might worry that it will be inconvenient. But online banking makes transfers between banks extremely easy these days. And though the transfer process can take one to three days, you can plan for this by not moving every penny of your savings to the new account. Just keep some portion in reserve where you have your checking account, in case you need an immediate transfer.

A look through our ranking of the best-paying ꦫinstitutions for high-yield savings accoꦇunts reveal that many are online banks. Often these are simply online divisions of established brick-and-mortar banks (sometimes even branded with a different name). But don't let that concern you, because all online banks that display the words "FDIC member" or the 澳洲幸运5官方开奖结果体彩网:Fede🥃ral Deposit Insurance Corp. (FDIC) logo on their website carry the same federal deposit insurance that physical banks do, meaning that up to $250,000 of your deposits—per person and per institution—are covered ♍should the institution fail.

Where Are Savings Account Rates Headed?

Savings rates closely follow the federal funds rate, the target interest rate set by the 澳洲幸运5官方开奖结果体彩网:Federal Reserve at which commercial banks borrow and lend to each other overnight. The Fed has been rapidly raising the federal funds rate since March 2022 in an effort to combat rising inflation, which peaked at a 40-year high in June last year. The Fed implemented seven rate hikes in 2022 totaling 4.25%, plus another four increases so far this year that have brought the total increase to 5.25%.

This aggressive campaign of hikes has in turn pushed savings, money market, and certificate of deposit rates to record levels. In fact, today's top savings account rate of 5.25% APY is likely the highest we've seen since before 2007 and perhaps as far back as 2001, since that's the last time the fed funds rate has been this high.

The Fed's last rate-setting meeting was held July 26, after which it announced its 11th increase in 12 meetings (it held rates steady at its June meeting). What comes next is unclear, however, because the Fed's latest announcement provided no strong indications on whether the committee will raise its benchmark rate even higher this year. The written announcement simply reiterated the Fed's commitment to bring inflation back down to its target level of 2%.

Federal Reserve Chairman Jerome Powell's post-meeting press conference also was noncommittal on the prospects of any additional rate increases. He emphasized that the rate-setting committee had not made any decisions on whether to raise rates another time in 2023, or if so, what
timing or pace they would take.

As we always caution, the economic landscape can change quickly, altering the Fed's course between meetings. But it is reasonable to expect that savings rates could still inch a little higher based on the July 26 Fed increase. And if the Fed does hike the fed funds rate higher again this year, that would almost certainly nudge savings rates even higher.

Consider a CD For a Portion of Your Savings

If you don't need a portion of your savings for months or even years, you stand to gain even more with one of the country's best certificates of deposit. While CDs require you to keep your funds on deposit for a term ranging from three months to five years, the advantage is that you get to lock in your interest rate for that full duration. It's a great option when rates are high like they are now, because CDs allow you to ex👍tend today's record rates far into the future.

Just remember that cashing out your CD before its maturity date will incur an 澳洲幸运5官方开奖结果体彩网:early withdrawal penalty, so it's best to think carefully about how much you can lock🔯 away, and for what duration.

Top Savi✅ngs and 💫CD Rates vs. National Average Rates

Rate Collection Methodology Disclosure

Every business day, Investopedia tracks the rates of almost 100 banks and credit unions that offer savings accounts to customers nationwide, using that data to determine 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 savings account's minimum initial deposit must not exceed $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 high-yield savings accounts, 澳洲幸运5官方开奖结果体彩网:read our full methodology.