what is a good apy for a savings account

When you’re trying to grow your money safely, a savings account is a classic choice. But with so many banks offering different rates, it can be confusing to know if you’re getting a good deal. The Annual Percentage Yield, or APY, is the total amount of interest you earn on your money over a year, and it’s the key number to watch. So, when you’re evaluating your options, it’s natural to ask yourself what is a good apy for a savings account in today’s financial landscape.

What Is a Good APY for a Savings Account Today?

As of recent years, a “good” APY is one that outpaces the national average, which often lingers well below 0.10%. In a healthy economic environment, many competitive online banks and credit unions offer high-yield savings accounts with APYs ranging from 4.00% to 5.00% or even higher. If your current savings account is paying you an APY close to 0.01%, moving your money to an account earning a multiple of that can make a significant difference in your financial growth over time.

Why Online Banks Often Offer Better Rates

You might wonder how some banks can offer rates that are many times higher than others. The answer often lies in their business model. Online banks and neobanks have much lower overhead costs than traditional brick-and-mortar banks. They don’t have to maintain physical branches or pay for as many staff, and they pass those savings on to you in the form of higher interest rates on your deposits.

Beyond the Rate: Other Factors to Consider

While a strong APY is crucial, it shouldn’t be your only consideration. Look for an account that has no monthly maintenance fees, as these can quickly eat into your interest earnings. Also, check the bank’s minimum balance requirements to avoid any surprises. Finally, ensure your money is safe by confirming that the bank is FDIC-insured or that the credit union is NCUA-insured, protecting your deposits up to at least $250,000.

Ultimately, a good APY is one that helps your money work as hard as you do. By looking beyond the big, traditional banks and focusing on accounts that offer a competitive rate with minimal fees, you can feel confident that your savings are positioned for steady growth.