High-Yield Savings Accounts Maintain Attractive Rates Despite Fed’s Recent Rate Cut
Despite the Federal Reserve‘s recent interest rate cut in September, high-yield savings accounts continue to offer attractive rates, with some banks maintaining APYs as high as 5.50%.
The highest nationwide rate is currently offered by Pibank, with an APY of 5.50%, closely followed by Newtek Bank at 5.25% APY. Other top performers include TotalBank, Bank5 Connect, and EverBank, all offering rates above 5.00% APY.
Even after the Fed’s rate cut, many online banks have managed to keep their savings account rates relatively high. For instance, Ally, BMO Alto, and Discover are still offering rates in the 4% to 4.6% APY range. Smaller online banks like Pibank and Newtek Bank have been particularly aggressive in maintaining high rates to attract new customers.
In addition to standalone high-yield savings accounts, some banks are offering combination savings and checking accounts with enhanced interest rates. For example, UFB Direct’s Freedom Checking paired with its Portfolio Savings account can earn up to 4.77% APY. Similarly, U.S. Bank and TD Bank offer higher rates when their savings accounts are linked with specific checking accounts.
Experts predict that while the Fed’s ongoing rate cuts will likely lead to a gradual decrease in savings account yields, the rates are unlikely to drop dramatically. Historically, these rates remain significantly higher than those seen in 2020 and 2021, making it a good time to open a high-yield savings account or consider high-yield CDs for longer-term savings.
High-yield savings accounts also offer the flexibility of withdrawing funds at any time without commitment, although some accounts may have minimum balance requirements to earn the highest APYs. Online banking has made it easier to manage and transfer funds between accounts, adding to the convenience of these high-yield savings options.
