Couple has what appears to be a serious conversation over paperwork in the kitchen.
Image source: Getty Images
Most Americans are earning almost nothing on their savings — and they don’t even know it.
The national average savings account rate sits at just 0.39%, according to the FDIC. But if you’re banking with a big traditional bank, it’s probably even worse — we’re talking 0.01% APY.
That means on a $10,000 balance, you’re earning roughly $1 a year in interest. 🤮
Instead, you could be earning between 3.00% and 4.00% APY right now with an online high-yield savings account (HYSA). That same $10,000 could be earning $300 to $400 annually — just by being in the right account.
What is your big bank actually paying you?
Here’s a quick look at what that rate difference actually means in real dollars across different savings balances, over the course of a year:
|
$5,000 Balance |
$10,000 Balance |
$25,000 Balance |
|
|---|---|---|---|
|
Big bank (0.01% APY) |
$0.50 |
$1.00 |
$3 |
|
National avg (0.39% APY) |
$20 |
$39 |
$98 |
|
Top HYSA (4.00% APY) |
$200 |
$400 |
$1,000 |
Data source: Author’s calculations.
The bigger your balance, the more that gap hurts. A $25,000 emergency fund sitting in a big bank savings account is leaving nearly $1,000 a year on the table.
And here’s the kicker: you’re taking on zero additional risk by switching. High-yield savings accounts are FDIC-insured up to $250,000 — the same protection you already have.
See all of today’s top high-yield savings accounts here.
Why online banks pay so much more
Online banks and fintech platforms don’t carry the overhead costs from physical branches, large staffs, and in-person infrastructure. And that lean business model means they can pass those savings directly to customers in the form of higher interest rates.
Traditional big banks don’t usually offer high APYs because most customers simply never check. Inertia is profitable for them — and costly for you.
The best HYSAs consistently offer rates 10x to 40x higher than the big bank average. That spread has been meaningful for the past several years, and even as rates shift, the gap between online banks and traditional banks tends to stay wide.
How to switch without losing access to your money
The most common hesitation I hear is this: “What if I need the money quickly?” It’s a fair question.
Banking online means you can’t run down to your corner branch and withdraw $5,000 in cash in a pinch. You need to plan ahead a little for money transfers.
Most online high-yield savings accounts let you:
-
Transfer money to and from your checking account within one to three business days
-
Link up your existing bank account in the app (for faster transfers)
-
Set up recurring deposits so saving becomes automatic
-
Access your balance online or via mobile app anytime
The switch itself typically takes about 10 minutes online. You open the account, link your current bank, and transfer whatever amount makes sense. Many people keep their checking account exactly where it is and simply move their savings over to earn more.
I currently earn 4.00% APY on my savings balance. The setup took one afternoon and I haven’t had to think about it since.
The bottom line
Your savings account should be working for you — not for your bank. The difference between 0.01% APY and 4.00% APY isn’t a small technicality. On a decent-size savings balance, it’s hundreds of dollars a year, every year, for doing absolutely nothing differently.
If you haven’t checked your savings rate recently, today is a good day to do it. And if you find out you’re earning next to nothing, the fix is simpler than you think.
Compare the best high-yield savings accounts and start earning more on your money.
Alert: highest cash back card we’ve seen now has 0% intro APR into 2027
This credit card is not just good – it’s so exceptional that our experts use it personally. It features a 0% intro APR for 15 months, a cash back rate of up to 5%, and all somehow for no annual fee!
Click here to read our full review for free and apply in just 2 minutes.
We’re firm believers in the Golden Rule, which is why editorial opinions are ours alone and have not been previously reviewed, approved, or endorsed by included advertisers. Motley Fool Money does not cover all offers on the market. Editorial content from Motley Fool Money is separate from The Motley Fool editorial content and is created by a different analyst team.The Motley Fool has a disclosure policy.