What APY is Considered Good For a Savings Account in 2024?
Written by
Jennifer Taylor
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Earning interest on your money is one of the easiest forms of passive income around. However, when it comes to interest rates, there’s significant variation between financial institutions.
That’s why it’s important to shop around to ensure you’re getting the best rate you can. If you’re going to park your money somewhere, it should be a savings account that pays competitively.
Banks like Milli are offering impressive rates — Annual Percentage Yield — on savings accounts that can allow you to rack up interest earnings.
You’re already on the right track by conducting research to find out what a good savings account interest rate is in 2024. Keep reading to find out more about average savings account rates and where to find the most competitive rates.
Don’t Settle For a Low Rate
If you think most savings accounts don’t typically earn much interest, you’re correct. As of Jan. 20, 2024, the national average yield for savings accounts is 0.46% APY, according to the FDIC.
This is problematic, because it stunts your money’s growth. Compound interest — more on that in a bit — is one of the best ways to grow your funds, but you won’t get very far with a notably low interest rate.
Therefore, it’s important to shop around to find the best possible interest rate. Doing this can help you grow your savings exponentially.
Don’t sell yourself short by choosing an account that pays minimal interest.
Earn More With Milli
Milli’s Savings Account offers a APY*, as of Feb. 29, 2024 — that’s more than 10 times the national average savings account.
Even better, Milli doesn’t charge any fees, and there are also no minimum-balance requirements. Your money is FDIC-insured up to $250,000, so you can feel confident your money is protected.
Interest starts accruing on the business day Milli receives credit for your deposit. It’s compounded daily and credited monthly.
Beyond the competitive interest rate, one of the best things about a Milli Savings account is its Jars feature. This allows you to direct funds to different goals to help you visualize and monitor your progress toward them.
Simply set a goal and include a start and end date, and Milli will calculate how much you need to save on a monthly, weekly or daily basis to reach your goal. Breaking your savings up into digestible portions can help you reach your objectives, because it makes it easy to track your progress.
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Cash In On Compound Interest
Compound interest is when you earn interest on not just your savings, but also on the interest you’ve already accumulated. This leads to a snowball effect, and over time, even a balance that started relatively small can grow substantially if you choose an account with a competitive interest rate.
For example, if you put $5,000 in a Milli Savings account, after one year of earning APY*, your total account balance would be $5,243.21. After three years, this number would rise to $5,765.71, surging to $6,340.28 after five years and totaling $8,039.82 after 10 years.
In comparison, if you put $5,000 in a savings account with a 0.46% interest rate — the national average yield for savings accounts — after one year, your total account balance would be just $5,023.05. Three years later, your balance would be $5,069.48, rising to $5,116.33 after five years and reaching $5,235.37 after 10 years.
In this hypothetical scenario, after 10 years, you’d earn $2,804.45 more in interest simply by choosing a savings account with a competitive interest rate. Clearly, this is a decision that shouldn’t be overlooked.
The Bottom Line
Savings account interest rates matter. By choosing a high-interest product like the Milli Savings account — offering APY* — you can give your funds significant growth, without lifting a finger.
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