One silver lining of the Fed’s historic string of interest rate hikes over the past year: Americans are earning more interest on their savings than they have in 15 years.
Some high-yield savings accounts now offer an APY that tops 4% — about 1,600 higher than the interest rate on traditional savings accounts. The average savings account interest rate overall still sits at 0.23%, according to a March 22 survey of institutions by Bankrate. Many big banks drag down the nationwide average by continuing to offer meager earnings on savings accounts. A Wall Street Journal analysis found that if Americans moved their deposits from the five biggest banks to the five providers with the highest-yielding savings accounts in the third quarter of last year, they could have earned an astounding $42 billion in additional interest.