Overview
Nothing beats a good interest rate.
Well, fine. Plenty of things do, unless you’re a little dull. But we should all appreciate how much a strong rate can do for our finances. That little number is what dictates the growth of your savings, and can help catapult you towards your goals.
With rates starting as low as 0.10% and a solid rate being viewed as 4.00%, you’d be forgiven for believing the impact of picking a specific interest rate would be negligible. But that 3.9% shift could be the difference between hundreds or thousands of dollars over the course of just a few years. In short, don’t undervalue the power of a strong interest rate.
Grasping the averages and knowing the potential of a high-yield savings account can help you significantly with your financial progress. So let’s take a look at the facts.
What’s the National Average?
According to the FDIC’s September 2025 data, the national average interest rate for savings accounts is 0.46% APY. That means if you put $10,000 in a typical bank savings account, you’d only earn around $46 in interest over a year. That feels like a tiny amount, and it is.
Don’t despair, though. Averages can be misleading. Traditional banks, the brick-and-mortar kind like Wells Fargo or Bank of America, pull the averages way down. Credit unions and online banks offer far more scope for your savings.
Why the Gap?
The difference in interest rates between the traditional institutions and modern ones comes down to simple overhead costs and customer strategy. The big banks rely heavily on the convenience they provide. They have tons of in-person branches, ATMs, and other features that mean a heck of a lot of operating costs and salaries. They need to keep their margins a little tighter to ensure they can run all those different aspects of their business.
Online banks and credit unions, on the other hand, don’t have those issues to worry about. Many of them are completely app-based, with some only operating a minimal customer service unit that’s fronted with AI and automatic chatbots to solve immediate problems. With lower costs, they can afford to offer customers more attractive interest rates, and as the world continues its march to total digitalization, this is something the big banks will have to consider. Credit unions operate as member-owned institutions, so they’re not profit-maximizing anyway.
High-Yield Savings Accounts (HYSAs)
High-yield savings accounts are where the real growth potential comes from. Blowing away the national averages, multiple online banks are currently offering APYs as high as 5.25%, almost ten times the national average.
A $10,000 deposit in a 5% HYSA would reap $500 a year in interest, a far cry from the $46 you’d earn at the 0.46% national average rate. You can see why that should be more attractive.
Here are just a few examples:
SoFi has a base HYSA APY of 3.80% but that can go as high as 4.50% when certain stipulations are met
LendingClub offers a 5.15% APY for those with regular deposits of $250 a month
Amex has a 4% APY with no minimum deposit
Explore our top high-yield savings accounts here. Each is tailored to different needs but can all supercharge your savings.
Historical Comparison
It used to be much worse. From 2010 through 2021, the national average sat below a miserable 0.10% APY. That’s approaching negligible. But the Federal Reserve raised interest rates in 2022 to help fight inflation, which has helped the online rates receive a welcome boost. The big banks, unfortunately, have remained stagnant.
What You Should Do
Don’t settle for 0.01%. If your money is in a big-bank savings account, you’re losing out. Do the math on whatever you currently have in your savings. It could be far more than you think.
Shop around at online banks and credit unions. Don’t just go for the first bank you find or the name that sounds familiar. Do your research, find plenty of options, and decide which is the best for your money. Consider how often you’ll deposit, how much you have, and what you can deposit straight away.
Consider liquidity needs. Savings accounts are perfect for emergency funds, short-term goals, or any cash you might need within a year. A HYSA can go a long way to help with these short-term goals.
It’s worth considering Certificate of Deposit accounts, too. But remember, if you need your cash to be easily accessible (like in an emergency fund mentioned above), a HYSA is a far better option.
The Point
Don’t be fooled by a bank claiming it’s got a better APY than the national average despite only offering 0.50%. While they’re technically not lying, you can do far better (as much as ten times better, in fact). Opting to open a High-Yield Savings Account with an online bank or credit union is an excellent way to maximize your hard-earned savings. It’s literally a few clicks away.
by your friends at The Daily Navigator
