Interest rates change daily, and the rate you see depends on the bank, the account type, and what the Federal Reserve has done recently

There is no single "interest rate right now." A savings account at one bank might pay 4.5% while another pays 3.2%. A money market account might pay more than a savings account. A CD might pay differently depending on whether it's a three-month or five-year term. The rate you actually receive depends on which bank you choose and which product you pick.

The Federal Reserve sets a target range for the federal funds rate — the rate banks charge each other for overnight loans. When the Fed raises or lowers this rate, banks typically adjust what they pay on savings products and what they charge on loans within days or weeks. But banks don't all move at the same time or by the same amount. Some pass along rate changes quickly; others lag behind.

To find the actual rates available to you right now, you need to check individual banks' websites or use a rate comparison tool. The rates posted today will almost certainly be different from the rates posted last week.

Key Takeaways

  • Interest rates on savings accounts, money market accounts, and CDs vary by bank and change frequently — sometimes daily.
  • The Federal Reserve's decisions affect the direction of rates across the banking system, but individual banks set their own rates.
  • You can compare current rates by visiting bank websites directly or using rate aggregator sites that update regularly.
  • The rate you lock in on a CD is fixed for the term, but rates on savings and money market accounts can change at any time.
  • Online banks typically offer higher rates than brick-and-mortar banks because they have lower operating costs.

How to find the rates banks are offering today

The most direct way is to visit the websites of banks you're considering and look for their current rates. Most banks display rates prominently on their homepage or in a "rates and fees" section. Write down the rate, the account type, and the date you checked — rates change, so the number you see today may not be the same tomorrow.

Rate comparison websites like Bankrate, DepositAccounts, and Money Market Rates aggregate rates from many banks and update them regularly. These sites let you filter by account type, minimum deposit, and FDIC insurance status. They don't show every bank, and they don't show rates in real time — there's usually a lag of a few hours — but they're useful for spotting which banks are paying the most right now.

If you already have a bank account, log into your online banking portal. Your bank will show you the current rate on your account and what new customers are being offered. Sometimes existing customers see a different rate than new customers.

Why rates differ so much between banks

Banks set rates based on what they need to attract deposits and what they can afford to pay. A bank that needs more deposits might raise rates to draw customers in. A bank that already has plenty of deposits might keep rates lower. Online banks typically offer higher rates than traditional banks because they don't have the cost of physical branches, so they can afford to pay more.

The type of account also matters. Money market accounts often pay more than savings accounts because you agree to keep larger balances and make fewer withdrawals. CDs pay more than savings accounts because you lock your money away for a set period. The longer the CD term, the higher the rate is usually — but not always.

Competition also plays a role. When one bank raises rates, nearby competitors often follow within days. When the Fed signals that rates might fall, banks sometimes lower their rates before the Fed actually moves, trying to lock in customers at higher rates while they can.

What the Federal Reserve's rate means for the rates you see

The Federal Reserve doesn't set the interest rates banks pay on savings accounts. Instead, it sets the federal funds rate — the interest rate at which banks lend reserve balances to each other overnight. The Fed announces a target range for this rate, typically in quarter-point increments like 4.25% to 4.50%.

When the Fed raises its target rate, banks generally raise the rates they pay on savings products and the rates they charge on loans. When the Fed lowers its target rate, banks generally lower rates. But the relationship isn't one-to-one. A 0.25% increase in the federal funds rate might result in a 0.25% increase in savings rates at some banks and a 0.10% increase at others.

The Fed meets eight times a year to review economic conditions and decide whether to raise, lower, or hold its target rate steady. You can find the Fed's announcement schedule and past decisions on the Federal Reserve's website. Banks often adjust their rates within a few days of a Fed announcement, though some wait longer.

How to compare rates across different account types

Different accounts serve different purposes, and the rates reflect that. Here's what you're typically choosing between:

Savings accounts let you withdraw money anytime without penalty, so banks pay lower rates — usually between 3% and 5% right now, depending on the bank. Money market accounts work similarly but often require a higher minimum balance and pay slightly more. Certificates of Deposit (CDs) lock your money away for a set term — three months, six months, one year, five years — and pay more because the bank knows it can use your money for that entire period. High-yield savings accounts are savings accounts that pay significantly more than standard savings accounts, usually offered by online banks.

When comparing rates, also look at the minimum deposit required, any monthly fees, and whether the rate is may provide or variable. A CD rate is locked in for the entire term. A savings account rate can change at any time, usually with a few days' notice.

When rates are likely to change

The Federal Reserve meets eight times per year on a published schedule. You can find the dates on the Federal Reserve's website. When the Fed announces a rate change, banks typically adjust their rates within a few days, though some take longer.

Banks also change rates based on their own business needs, independent of the Fed. A bank might raise rates to attract deposits or lower rates if it has plenty of money on hand. Economic news — inflation reports, employment data, housing starts — can influence the Fed's decisions and cause banks to anticipate rate changes.

If you're shopping for a CD, check the Fed's schedule. If a rate increase seems likely in the near future, you might wait. If a rate decrease seems likely, locking in a rate now protects you. If you're in a savings account, remember that the rate can change at any time, so don't assume today's rate will be there in three months.

The difference between APY and APR

Banks quote savings rates as APY, which stands for Annual Percentage Yield. This is the total return you'll earn in a year, including the effect of compounding — when interest you earn gets added to your balance and then earns interest itself. APR, or Annual Percentage Rate, is used for loans and doesn't include compounding the same way.

For savings accounts, always compare APY to APY. A 4.5% APY is not the same as a 4.5% APR. The APY already accounts for how often interest is compounded — daily, monthly, or quarterly — so it's the true number to use when comparing accounts.

Banks must disclose the APY prominently when you're shopping for an account. If you see a rate quoted without "APY" next to it, ask the bank to clarify what that rate actually means.

Frequently Asked Questions

What's a good interest rate right now?

That depends on the account type and the current economic environment. For savings accounts, rates between 4% and 5% are competitive as of early 2024, though this changes. For CDs, longer terms typically pay more — a five-year CD might pay 4.5% to 5.5% while a three-month CD might pay 3.5% to 4.5%. Check rate comparison sites to see what's available today.

Will interest rates go up or down soon?

Nobody knows for certain, but you can watch the Federal Reserve's statements and economic reports to see what experts are predicting. The Fed's website publishes its meeting schedule and past decisions. Financial news outlets cover Fed announcements and what they might mean for future rate changes.

Should I lock in a CD now or wait?

If you think rates might fall, locking in now protects you. If you think rates might rise, waiting could get you a higher rate. The trade-off is that you won't know for certain. Many people split the difference by opening CDs with different maturity dates — some short-term, some long-term — so they're not betting everything on one prediction.

Can a bank lower my savings account rate without telling me?

Banks can lower rates on savings accounts, but they must notify you before the change takes effect. The notice period varies by bank, typically five to ten days. You'll receive notice by email, mail, or through your online banking portal. If you disagree with the change, you can move your money to another bank.

Why do online banks pay more than regular banks?

Online banks have lower operating costs because they don't maintain physical branches, don't employ as many staff, and don't pay for building leases and utilities. They pass some of those savings to customers in the form of higher interest rates. The trade-off is that you can't walk into a branch to deposit cash or speak to someone in person.