How Shockingly Low Interest Rates Are at the Big Banks

The efforts by the Federal Reserve to tame inflation have been a mixed bag for many Americans looking to save money.

While goods and services stubbornly continue to cost more than before, you may have noticed that the funds in your high-yield savings accounts have enjoyed higher APYs (annual percentage yields) of late, which means that you've been able to make more money on your money.

Savings Rates Are Rising: How High Will They Go?

With the Fed continuing to make adjustments, APYs are expected to rise above 5% at some point this year. What's surprising about this is that even now higher APYs are being offered at some (not all) of the "giant monster mega-banks," as money expert Clark Howard calls them.

Let's take a look at the interest rates and APYs for some of the most popular savings account products at the big banks. We'll then look at savings rates at the best online banks.

Interest Rates at 4 Big Banks

Financial InstitutionAccount NameMonthly Service FeesInterest RateAPY
Bank of AmericaAdvantage Savings Account$8 (Waived with $500 or more daily balance or if linked to specific BoA checking accounts)
CitibankAccelerate Savings Account$4.50 (Waived with an average monthly balance of $500)3.78%3.85%
JP Morgan ChasePremier Savings Account$25 (Waived with $15,000 or more daily balance or linked to Premier Plus Checking or Sapphire Checking)0.01%0.01%
Wells FargoPlatinum Savings Account$12 (Waived with $3,500 minimum daily balance)0.25%0.25%

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Interest rates as of February 14, 2023

Note: Rates may vary by location.

Although the brick-and-mortar banks of late have had to raise their savings rates to stay competitive, you typically get more bang for your buck with an online savings account. Let’s look at the interest rates at the top online banks:

Interest Rates at the Best Online Banks

Financial InstitutionAccount NameWhy It Makes Our ListAPY
Ally BankOnline Savings AccountSuite of tools includes automatic savings transfers, savings goal allocations.3.4%
American ExpressHigh Yield Savings AccountOffers competitive interest and no fees while syncing nicely with checking and credit card products.3.5%
Capital One360 Performance SavingsYou can view your credit score and allocate with "My Savings Goals." This account also has a highly-rated app.3.4%
Discover BankOnline Savings AccountExtreme about no fees, and this account's "Quick View" lets you see your balance without logging in.3.4%
MarcusOnline Savings AccountThis competitive interest, stand-alone savings account is also fee-free.3.75%
PenFed Credit UnionPremium Online Savings AccountA $5 deposit gets you membership at the only credit union on our list.2.7%
Synchrony BankOnline Savings AccountNo-frills stand-alone savings account offers competitive interest, highly-rated app.3.75%

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Why You Should Shop Your Bank Today

Because savings rates can change quickly, Clark wants you to be nimble with your money moves. He has been saying for years that you should think long and hard about moving your money if you keep it in one of the big banks. For him the question (and answer) is simple:

“Do you want to be ripped off by the bank?” he says on his podcast. “When I say bank, I’m talking about a bank where there’s a physical branch. And yes, some small local banks are actually offering better deals like credit unions do, but generally most banks are controlled by bigger players and they just squeeze you. They just take advantage of you. And it’s your choice if you want to be taken advantage of.”

How To Shop Your Bank Right Now

Here's how you can shop your bank and make your money work for you:

Check Your APY

If you already have a high-yield savings account, confirm the APY with your financial institution. You should be able to log in to your online banking account to see it. It should also be on your bank’s website.

If your savings account’s APY is not competitive, it’s time to do some bank shopping!

Look for Low- or No-Fee Accounts

Many traditional banks offer accounts filled with “gotcha” fees, which Clark wants you to avoid. When researching financial institutions, look for their fee schedule or deposit account agreement, which is typically posted online.

A bank’s deposit agreement will generally show you what it charges for the following fees:

  • Checking account
  • Required minimum balance
  • Annual fee

Along with timing when to move your money, there are also other things to consider when you're thinking about going from one bank to another. We have a guide on how to switch banks.

Research Online Banks

Aside from low fees, online banks offer unparalleled convenience when it comes to managing your money digitally. When choosing an online bank, one of the first things you should look at is whether the financial institution is insured by the Federal Deposit Insurance Corporation (FDIC), which federally protects deposits in the event of a bank failure or theft.

The FDIC says you can find out if a bank is insured by doing the following:

  • Calling the FDIC toll-free: 1-877-275-3342
  • Using's Bank Find feature
  • Looking for the FDIC sign where deposits are received

Consider a Credit Union

When you compare a bank vs. a credit union, you'll find that not only does the latter typically have lower fees, but it also offers more personalized customer service, which can make your experience with them a lot easier.

Credit unions also typically beat the national average, when it comes to savings rates. Clark says to make sure the credit union you choose is insured by the National Credit Union Association (NCUA). That's the credit union equivalent to the FDIC.

Final Thoughts

Influenced by the Fed, interest rates have been impacting the wallets of consumers for several months now and will continue. Clark wants you to be proactive when it comes to parking your money by shopping your bank to get the best savings rates and APYs.

Read our guide on the best high-yield savings accounts this month.

The post How Shockingly Low Interest Rates Are at the Big Banks appeared first on Clark Howard.