Interest rates change daily, and the rate you see depends on the type of account and the bank

There is no single "the" interest rate right now. Banks set their own rates for savings accounts, money market accounts, and certificates of deposit (CDs). The federal funds rate — the rate the Federal Reserve sets — influences what banks offer, but each institution decides whether to pass that rate to you and by how much.

A high-yield savings account at one bank might pay 4.50% while another pays 4.25%. A 1-year CD at Credit Union A might be 4.75% while a 1-year CD at Credit Union B is 4.60%. The only way to know what you can actually earn is to check the institutions where you want to save.

Interest rates also move in response to Federal Reserve decisions. When the Fed raises or lowers its benchmark rate, banks typically adjust their savings rates within days or weeks. This means the rate you see today may be different next week.

Key Takeaways

  • Each bank and credit union sets its own interest rates, so comparing multiple institutions is necessary to find the highest rate for your account type.
  • The Federal Reserve's benchmark rate influences what banks offer, but does not determine it — banks choose their own margins.
  • Rates change frequently, especially after Federal Reserve announcements, so check current rates before moving money.
  • High-yield savings accounts and CDs typically offer higher rates than traditional savings accounts at the same institution.
  • Online banks usually offer higher rates than brick-and-mortar banks because they have lower overhead costs.

How to find current rates for savings accounts

Visit the website of any bank or credit union where you have an account or are considering opening one. Look for a page labeled "Rates," "Current Rates," "Savings Rates," or "APY." The annual percentage yield (APY) is the number that matters — it includes the effect of compounding and shows what you will actually earn over a year.

If you do not see rates on the main page, search the site for "savings account rates" or "APY." Most banks display rates prominently because they use them to attract customers. If a bank makes rates hard to find, that is often a sign the rates are not competitive.

You can also call the bank's customer service line and ask for the current APY on a savings account. They will give you the rate that applies to new accounts opened today. Rates for existing accounts may differ slightly.

How to find current rates for CDs

CDs have different rates depending on how long you lock your money away. A 3-month CD, a 1-year CD, and a 5-year CD at the same bank will have different rates. Longer terms usually pay more, but not always — sometimes short-term rates are higher.

Go to the bank's website and find the CD rates page. It will show a table with different term lengths and their corresponding APYs. Write down the rates for the terms you are considering, because you will need to compare them across banks.

Some banks also list CD rates on comparison websites like Bankrate, DepositAccounts, or the FDIC's BankFind tool. These sites pull rates from multiple institutions and update them regularly, which saves you from visiting each bank individually. However, always verify the rate on the bank's own website before opening an account, because rates can change between when the comparison site updates and when you apply.

Why rates differ between banks

Online banks typically offer higher rates than traditional banks because they do not pay for physical branches, tellers, or as much staff. That cost savings gets passed to customers in the form of higher APYs. If you see a savings account rate that is much higher than others, check whether it is from an online bank — that is usually why.

Credit unions sometimes offer competitive rates to their members, but membership requirements vary. Some credit unions are open to anyone in a geographic area; others require you to work for a specific employer or belong to a specific organization. If you are a member of a credit union, compare its rates to online banks before deciding where to save.

Banks also adjust rates based on how much money they need to attract. During periods when banks have plenty of deposits, they may lower rates. When they need more deposits, they raise rates to compete. This is why rates fluctuate even when the Federal Reserve does not change its benchmark rate.

What the Federal Reserve rate means for your savings

The Federal Reserve's benchmark rate is the interest rate at which banks lend money to each other overnight. It is currently in a range set by the Fed's policy committee. When the Fed raises this rate, banks eventually raise the rates they offer on savings accounts and CDs. When the Fed lowers it, banks typically lower savings rates.

However, banks do not move in lockstep with the Fed. Some banks raise savings rates quickly after a Fed increase; others wait weeks or months. Some banks cut savings rates before the Fed cuts its benchmark rate, anticipating the move. This is why your rate can change even when the Fed has not made an announcement.

You can track Federal Reserve decisions by visiting the Federal Reserve's website (federalreserve.gov) and looking for the latest policy announcement. The Fed typically meets eight times per year and announces its decision on interest rates. These announcements often trigger changes in bank rates within the following week.

Comparing rates across multiple institutions

Create a simple spreadsheet or list with the account type (savings, money market, or CD), the term length (if applicable), and the APY from each bank you are considering. Include the bank's name and the date you checked, because rates change. This makes it easy to see which institution offers the best rate for your situation.

When comparing, make sure you are looking at the same type of account. A high-yield savings account at Bank A is not the same as a regular savings account at Bank B, even if they sound similar. High-yield accounts almost always pay more.

Also check the minimum deposit required to open the account and to earn the advertised rate. Some banks require $1,000 or more to open a CD at the highest rate, while others have no minimum. If you have less to deposit, you may earn a lower rate or need to choose a different bank.

When to lock in a rate with a CD

CDs lock in a fixed rate for a set period. Once you open a CD, that rate does not change, even if bank rates fall. This can be an advantage if you think rates will drop, but a disadvantage if rates rise.

If current CD rates are near historical highs and you do not expect rates to go much higher, a CD can be a good choice. If rates have been rising and you think they will continue to rise, you might wait before locking in a rate. However, predicting interest rate movements is difficult, and the difference between waiting and acting now is often small.

One strategy is to build a CD ladder: open CDs with different maturity dates (3 months, 1 year, 2 years, 5 years) so that some of your money becomes available each year. This lets you reinvest at new rates without waiting for all your money to mature at once.

Frequently Asked Questions

What is the difference between APY and APR?

APY (annual percentage yield) includes the effect of compounding — interest earned on interest. APR (annual percentage rate) does not. For savings accounts and CDs, always look at APY, because that is what you will actually earn. APR is used for loans and credit cards.

Do I need to have a checking account at a bank to open a savings account there?

No. Most banks let you open a savings account or CD without a checking account. However, you will need a way to fund the account and receive withdrawals, so you will typically link it to an external bank account or provide a debit card.

Can I withdraw money from a CD before it matures?

Yes, but most CDs charge an early withdrawal penalty if you take money out before the term ends. The penalty is usually a certain number of months of interest. Before opening a CD, ask what the penalty is — some banks charge more than others.

Are savings accounts and CDs insured if the bank fails?

Yes. The FDIC (Federal Deposit Insurance Corporation) insures deposits up to $250,000 per account type per institution. This means if the bank fails, you get your money back up to that limit. Credit union deposits are insured by the NCUA (National Credit Union Administration) with the same $250,000 limit.

Should I move my money to a bank with a higher rate?

It depends on how much money you have and how much higher the rate is. If you have $10,000 and the rate difference is 0.25%, you earn about $25 more per year — probably not worth the effort. If you have $100,000 and the difference is 1%, you earn $1,000 more per year, which may be worth opening a new account. Calculate the difference for your situation before deciding.