As we approach the end of 2023, high-yield savings account rates remain robust, with the top 10 high-interest savings accounts delivering an annual percentage yield (APY) of at least 5.29%.
This is a significant increase from the previous year, with the average savings account deposit rate more than doubling. Experts agree that it’s a prime time to shop around for the best rates.
Mark Hamrick, Bankrate Washington bureau chief, notes, “Cash, properly allocated in a higher yielding deposit account, has finally gotten a better return, where it might have been a forgotten financial stepchild in years past.”
The rise in rates is largely due to the Federal Reserve’s efforts to curb inflation by raising interest rates. Banks have followed suit to attract and retain deposits.
Daniel Carey, senior vice president, head of finance and accounting at Cambridge Savings Bank, explains, “Banks have utilized high-yield savings and CD accounts to compete against each other for new customers.”
Carey adds that the digital banking revolution has made high-yield savings accounts a popular product due to their ease of use and lack of restrictions on withdrawals compared to CDs. He also notes that while the central bank hasn’t increased the benchmark funds rate since October, financial institutions often take time to adjust their offerings.
The average national deposit rate topped 0.46% APY as of Nov. 20, according to the Federal Deposit Insurance Corporation. That’s up from just 0.24% one year ago.
When it comes to choosing the right savings account, Carey advises consumers to consider rates, product terms, and the ease of working with the financial institution. Hamrick adds that given the competitive nature of banks and credit unions today, potential depositors shouldn’t accept anything too low.
“Higher is better, and yields of 4% to 5% shouldn’t be too hard to locate,” he says.
Among the top high-yield savings accounts for December 2023 are BECU’s Member Advantage Savings account offering a generous 6.17% APY for the first $500, and DCU’s account also offering 6.17% APY for the first $1,000 deposited.
Other notable accounts include Popular Direct’s account with a 5.40% APY, BrioDirect’s account with a 5.35% APY, and Flagstar Bank N.A.’s account with a 5.35% APY.
Accounts powered by Raisin, a savings account marketplace, offer a high 5.30% APY with only a $1 starting deposit and no balance restrictions or monthly maintenance fees.
VyStar Credit Union and DR Bank, both also powered by Raisin, offer a competitive 5.29% APY rate with a minimum $1 starting deposit.
As always, it’s critical to read all of the fine print before opening an account to learn about any potential restrictions or hurdles.
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