As we head into the final month of 2023, high-yield savings account rates remain strong, with the top 10 high-interest savings accounts delivering an annual percentage yield (APY) of at least 5.29%. Experts advise that it’s a good time to shop around for the best rates.
Bankrate Washington bureau chief Mark Hamrick 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 over the past year is largely due to the Federal Reserve’s efforts to control rising inflation by increasing interest rates. Banks have followed suit to attract and retain deposits, explains Daniel Carey, senior vice president, head of finance and accounting at Cambridge Savings Bank.
“Banks have utilized high-yield savings and CD accounts to compete against each other for new customers,” Carey says. He adds that the popularity of high-yield savings accounts has grown with the rise of digital banking, thanks to their ease of use and lack of withdrawal restrictions compared to CDs.
Despite the Federal Reserve not increasing the benchmark funds rate since October, when it was raised to 5.25%-5.5%, financial institutions often take some time to adjust their offerings. Carey explains, “When the Fed raises rates, it typically takes six months for the change to make its way through the economy.”
The average savings account has seen rates more than double from a year ago. The average national deposit rate topped 0.46% APY as of Nov. 20, up from just 0.24% one year ago, according to the Federal Deposit Insurance Corporation.
Choosing the right savings account depends on your financial goals. Carey suggests visiting websites that aggregate rates from many different financial institutions. He advises considering factors beyond rates, like 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.
The 10 best deposit rates for high-yield savings accounts in December 2023 are all protected by either the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). It’s important to read all of the fine print before opening an account to learn about any potential restrictions or hurdles.
BECU is offering a generous 6.17% APY this month for a Member Advantage Savings account, but this rate only applies to the first $500. DCU is also paying 6.17% APY, but this rate applies to the first $1,000 deposited in your account.
Other high-yield savings accounts with competitive rates include Popular Direct, BrioDirect, Flagstar Bank N.A., and Raisin, among others. These accounts offer APYs ranging from 5.29% to 5.40%, with varying minimum deposit requirements and terms.
In conclusion, with the current high-interest rates, it’s a good time to consider opening a high-yield savings account. However, it’s essential to shop around and consider all factors, not just the interest rate, before making a decision.
Let us know what you think, please share your thoughts in the comments below.
