Banks Still Paying High Savings Account Rates 5 Weeks After Fed Rate Cut

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• Weeks after the Federal Reserve’s September rate cut, banks have kept savings account rates steady.
• Major online banks continue to pay around 5% APY for high-yield savings accounts.
• Some banks have also kept rates high through combined checking/savings offers.

Last month, the Federal Reserve cut interest rates for the first time in 2024. It’s been a while since the last rate cut, four years in fact.

Savings account interest rates often fall when the Federal Reserve cuts rates. However, as this is the first rate cut in years, several of the top banks have been able to maintain good rates on savings accounts to keep new customers coming in.

High-yield savings account rates still pay up to 5.50% APY

The best high-yield savings accounts peaked in early to mid-2024, with the highest-yielding domestic accounts offering 5% to 5.55% APY.

Rates at many banks began to drop in anticipation of the Federal Reserve’s first rate cut of the year. After September’s rate cuts, more types of high-yield savings accounts also fell.

Overall, the declines have been relatively small, however. Smaller online banks have maintained 5% interest savings accounts. Pibank leads the pack with 5.50% APY on Pibank Savings, and Newtek Bank follows close behind with 5.25% APY on the Newtek Bank High Yield Personal Savings Account. The biggest online banks, like Ally, BMO Alto and Discover, have also managed to maintain relatively good savings account rates between 4% and 4.6% APY.

Combined savings/checking offers keep high rates on the table

To continue attracting new customers, some banks have opted for combined savings accounts/current offers with high interest rates.

UFB Direct, an online division of Axos Bank, offers an additional 0.20% APY when you bundle UFB Direct Freedom Checking with UFB Portfolio Savings (you’ll earn 4.57% APY on its own).

If you’re interested in brick-and-mortar banks, US Bank and TD Bank have similar offerings.

When combined with US Bank Smartly® Checking or the US Bank Secure Debit Account, the US Bank Smartly® Savings Account pays up to 4.10% APY. You can earn 4.10% APY by keeping $25,000 or more combined between your eligible accounts. For your US Bank Smartly® Savings Account it only offers up to 0.26% APY.

TD Signature Savings pays 0.01% to 4.00% APY. To earn a relationship fee, you must have an eligible TD Bank account such as a TD Bank Complete Checking or TD Bank Beyond Checking Account. You must make at least three customer-initiated transactions or receive a monthly direct deposit into this account. To earn 4.00% APY (the highest savings account rate), you must also maintain a minimum daily balance of $100,000 or more. By itself, TD Signature Savings only offers an APY of 0.01% to 0.05%.

Note that potential Fed rate cuts are on the horizon

At the Fed’s September meeting, the Federal Reserve updated its summary of economic projections with projections for further rate cuts through 2026. This will likely result in further rate cuts for savings accounts in general.

Savings account rates also have variable interest rates, meaning the rate isn’t locked in once you open the account. It can change at any time.

You can switch banks if the rate on your savings account drops significantly, but chasing rates can take more time and effort than it’s worth, so switching banks every time rates drop is not recommended. Since high-yield savings accounts typically pay better than average savings account rates regardless of the economic environment, it’s best to open an account with a full-service bank you like.

If you prefer to keep the same rate over a period of time, the best CDs may be right for you. However, keep in mind that CDs don’t offer as much flexibility as savings accounts and charge early withdrawal penalties for taking money out early.