The Average Savings Account Has .08% APY, But Here’s How To Get More

While part of the goal of a savings account is to set money aside for the future, you also hope that money will grow a little bit (or at least keep pace with inflation).

But according to data from the Federal Deposit Insurance Corp (FDIC), the organization that insures savings accounts, the average annual percentage yield (APY) on savings accounts has dropped to .08%.

While it might be more convenient to use one traditional bank for all your financial services, you could earn more APY with some online savings accounts.

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The APY is the percent of your total savings account balance that you’ll add in interest over the course of a year. With .08% APY, a $1,000 balance would only be worth 80 cents more.

Many major banks offer even less than that, with interest rates that dip as low as .01%. A larger percentage of the total U.S. population lives in Reading, Pennsylvania than the percent of your balance you’ll earn in interest in a year.

But with a high yield savings account with more APY, you can earn up to 20 times the average rate in interest each year, without any effort on your part.

Many of the providers who offer high yield savings accounts are online banks, which don’t have the expensive infrastructure of banks with physical branches and are eager to bring in more customers. While some online banks are new to the financial services scene, others are new brands or extensions of well-established financial institutions.

Fiona makes it easy to find high yield savings accounts from across the internet on their simple to use online platform. Users can search and compare available offers from the best providers in their area and quickly select the highest performing account. 

High yield savings accounts are best designed for short-term savings goals or emergency funds. Because they keep your cash liquid and there is no risk of losing your funds (in comparison to investing it in stocks or hard-to-access retirement accounts), savings accounts make it easy to access your money if and when you need to make a withdrawal. If you’re saving for longer-term goals more than five or 10 years out, like a college fund, an investment account might help your money grow faster.

As you build your savings account, there are other factors to consider beyond the straightforward APY of the account. Incremental fees can add up over time and counteract some of the interest you’ve accrued on your account. Some providers charge fees if you don’t carry a certain minimum balance, or just for basic account maintenance. Other providers won’t even let you open an account unless you deposit a certain base sum of money. 

Use Fiona to compare different offer terms and select the best overall savings account for you. Fiona will match you with the best available offers for your financial needs, and put you on track for a healthy vacation or a rainy day fund.