Some savings accounts pay far more than others
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The national average interest rate for savings accounts is a paltry 0.11%, according to Bankrate data from July 27. The good news? Many online banks offer rates far higher than the national average — something you may want to consider as pros say that despite high inflation, most Americans need somewhere between 3-12 months of income in a safe spot like a high-yield savings account. (Here are some of the best high-yield savings accounts right now.)
“A good way to combat inflation is to seek out higher interest rates on savings accounts which slows the impact of inflation on your cash,” says Chanelle Bessette, banking expert at NerdWallet.
The best high-yield savings accounts right now
If you have at least $5,000 to deposit into an online savings account, Citizens pays 1.75% with no fees. LendingClub pays 1.52% with no minimum balance, Synchrony high yield savings pays 1.65% with no minimum opening deposit, and SoFi pays 1.80% with no minimum balance. CIT Bank pays 1.90% with a $100 minimum balance required, and Quontic Bank pays 1.85% as long as you have $100 in an account.
If you’re able to jump through even more hoops, Varo Bank offers 5.00% APY so long as you get direct deposits totalling $1,000 or more and you don’t exceed a $5,000 balance at the end of each business day. With the 5.00% rate on $1,000, you can earn $50 per year, versus just $12 per year with Varo’s standard 1.20% rate or $0.80 which is the national average.
The best savings accounts with a cash bonus
Not only do some savings accounts pay more than the abysmal national average, you might even be able to find one that offers a cash bonus. Discover pays 1.30% and a $200 bonus, but you have to deposit $25,000 to get it; and New Alliant Credit Union members can claim a $100 bonus in addition to 1.40% APY when opening an Ultimate Opportunity Savings account through MyAlliant.com and deposit $100 a month for 12 consecutive months, at the end of which Alliant will deposit $100 into the account.
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