Average saving account interest rate across various financial institutions
In the current financial landscape, individuals seeking high-yield accounts may find online banks to be a more advantageous choice compared to larger, traditional banks. This shift is primarily due to lower minimum balances, the absence of monthly fees, and the same annual percentage yield (APY) on all balances.
Online-only banks often boast higher APYs at lower minimum requirements to open the account and earn the highest rate. For instance, as of early July 2025, Axos Bank offers around 4.66% APY, EverBank 4.3% with no minimum deposit required, and other online banks like LendingClub offer 4.4% or higher. These rates are significantly higher than the national average savings account yield of approximately 0.38% to 0.59%, according to surveys conducted by various sources.
### Online Banks vs Traditional Banks: A Comparison
| Feature | Online Banks | Traditional Banks | |-------------------------|----------------------------------------------|--------------------------------------------| | **Interest Rates (APY)**| Much higher, often 4% to 5% APY on savings | Much lower, close to or below the national average (~0.38% - 0.59%) | | **Minimum Balance Requirements** | Often low or even $0 minimum to open or earn APY | Usually higher minimums or tiered to earn interest | | **Fees** | Typically low or no monthly fees | May have monthly maintenance fees, especially if minimum balances not met | | **Accessibility** | Online/mobile focused, 24/7 access | Physical branches plus online, may offer more in-person service | | **Yield Stability** | Rates can change with Fed rate adjustments but currently steady | Lower yields, less sensitive to Fed rate changes |
The Federal Reserve’s current target federal funds rate (4.25% to 4.50%) closely influences savings account yields, so rates on high-yield savings accounts have been relatively stable since late 2024, with some small recent decreases.
By choosing an online high-yield savings account, savers can maximize their interest earnings without the need for a large initial deposit or maintaining a high balance. Traditional banks, while offering more convenience through physical branches, price this convenience with lower interest rates and sometimes higher fees and balance requirements.
In summary, if you want the best APY on your savings, online banks’ high-yield savings accounts are considerably better than traditional banks, with higher interest rates and more favorable minimum balance requirements. The national average remains low because it includes many traditional banks with lower rates. Choosing an online high-yield savings account is generally the optimal choice for earning higher returns on cash savings in 2025.
It's worth noting that the power of compounding helps your interest earn interest over time, making even small differences in APY significant in the long run. The website surveys nearly 500 banks and credit unions weekly to generate the national averages, providing a useful gauge to find a bank offering an APY multiple times higher than the national average.
Calculate the difference between the APY at a big bank compared with the yield at an online bank to visualize higher-interest earnings. High-yield savings accounts offer competitive returns with low minimum balance requirements, making them an attractive option for many savers. Some banks even offer relationship rates, linking a checking account with a savings account to earn a higher yield.
Feedback is always welcome to improve the content and services of the website. Responses are anonymous and will only be used for improving the website. Keep in mind that APYs may have changed since the last update and may vary by region for some products.
- In the realm of personal-finance, online-banking-and-insurance entities, such as Axos Bank and EverBank, are noted for offering significantly higher savings accounts APYs, in some cases up to 5%, as opposed to traditional banks that generally hover around the national average of approximately 0.38% to 0.59%.
- For those prioritizing higher-yield from their savings accounts, banking-and-insurance industry analysts often advocate for online savings accounts, given their higher APYs, lower minimum balance requirements, and the absence of monthly fees that are common in the industry.
