Q:

What are some different rates for savings accounts?

A:

Quick Answer

Savings account interest rates can vary from very low rates at banks, which may have rates as low as 0.01 percent, to higher-yield accounts at online banks, which can be as high as 1.10 percent. Some local credit unions offer significantly higher interest rates on savings accounts, although membership to credit unions may be limited, based on geography or employment.

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Full Answer

Online-only banks, such as Ally and Sychrony, tend to have higher average interest rates on savings accounts than traditional banks. As of October 2015, both of these banks, along with MySavingsDirect and Barclays Bank Delaware, offer savings accounts with interest rates above 1 percent, which far exceeds the national average. Another option through online and traditional banks is a certificate of deposit (CD), which usually offers higher interest rates in exchange for requiring that funds will be deposited for a specified period of time.

Depending on an investor's employment and geographical location, local credit unions can offer far more competitive rates than both online and traditional banks, with rates around 4 percent. There are usually restrictions to opening a savings account at a credit union, however, such as deposit requirements and requirements to make a certain number of debit card purchases within a given time period.

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