The difference 1% can make to your savings

A slight increase in your interest rate can add up to thousands over the life of the account.

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Comparing savings accounts to get the best APY can help you rack up a lot of extra interest — but make watch out for introductory offers attached to less-than-stellar long-term accounts.

How much difference does a 0.50% or 1.00% increase in APY make?

rebeccaA percent, or even half a percent, difference can add up to significant savings over time. For example, Rebecca puts $40,000 into a savings account with a 2.50% APY, and she adds $750 each month. After five years, she’s made $8,200.45 in interest.

If she would have opened an account with a 3.00% APY, she would have made $9.949.71 in interest, or about $1,749 more.

If Rebecca’s APY was 3.50%, she would have made $11,737.30 — that’s an extra $3,537 over five years just for choosing an account with an APY that was 1% higher.

How to get higher interest rates

To get a bump in your savings account APY:

  • Compare accounts. Both at different banks and even within the same bank. For example, if you meet the monthly minimum, a money market account could net you a higher interest rate than a traditional savings account. If you won’t need to access your money anytime soon, consider opening a CD account.
  • Consider online and challenger banks. Newer online-only and app-based challenger banks don’t have to deal with the overhead that comes with operating bank branches, and they can pass those savings on to you in the form of better interest rates.
  • Look for introductory offers. Some savings and money market accounts will offer increased rates for an introductory period. Just make sure that you’re still happy with the rate your account will revert back to when that period is up.

Hidden fees and lower interest rates in the fine print

Some require you to meet a minimum deposit requirement in order to get the advertised interest rate. Others will charge monthly fees if you don’t meet the required direct deposit threshold, which can quickly eat into your savings.

Editor's pick: CIT Bank Savings Builder High Yield Savings Account

  • Interest compounded daily
  • 24/7 online account access
  • FDIC insured

Editor's pick: CIT Bank Savings Builder High Yield Savings Account

A super-high interest rate if you're in the habit of saving at least $100 per month or have $25K in the bank. Earn up to $300 Cash Bonus with a $50K deposit. Open to both current and new customers. Conditions apply

  • APY: 1.85% with a minimum balance of $25,000 or a monthly deposit of $100+
  • APY: 1.17% with a balance below $25,000 and monthly deposit of less than $100
  • Monthly fee: None

Compare savings accounts and CDs with high interest rates

Name Product Interest rate (APY) Fee Minimum deposit to open
2.00%
$0
$100
Earn a competitive rate with a balance higher than $10,000.
1.90%
$4 per month
(can be waived)
$5,000
Competitive rate and secure access to your money via your desktop or mobile device. Interest that compounds daily.
2.05%
$4.50 per month
(can be waived)
$0
This savings account offers no minimum deposit and a competitive APY in select areas.
1.85%
$0
$100
A super-high interest rate if you're in the habit of saving at least $100 per month or have $25K in the bank. Earn up to $300 Cash Bonus with a $50K deposit. Open to both current and new customers. Conditions apply
2.00%
$10 per month
(can be waived)
$5,000
Enjoy the security and earning potential of a savings account while maintaining the flexibility to write checks.
2.15%
$7 per month
(can be waived)
$25
A high interest savings, a short-term savings and a checking account, paired with digital money management tools – all working together to help you better manage your financial life.

Compare up to 4 providers

Name Product 1-year APY 18-month APY 2-year APY 3-year APY 5-year APY
2.45%
2.5%
2.5%
2.65%
2.9%
2.45%
2.5%
2.65%
2.85%
2.2%
1.9%
1.8%
1.65%
1.6%
2.1%
2.1%
2.1%
2.1%
2.2%
2.1%
2.1%
2.2%
2.25%
2.3%
2.1%
2.1%
2.15%
2.15%
2.2%

Compare up to 4 providers

Bottom line

Even a small difference in interest rate can make a significant difference to your savings over the course of several years. If you’re not convinced that you’re getting the best interest rate out there, compare savings accounts and start saving more with a better APY.

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