5 weeks after the Fed cut rates, banks still want your cash — and they’re paying to get more of it

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• Weeks after the Federal Reserve’s September rate cut, banks have kept solid savings account rates.
• Top online banks are still paying around 5% APY for high-yield savings accounts.
• Some banks have also maintained high rates through combo checking/savings offers.

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

Savings account interest rates often fall when the Federal Reserve cuts rates. However, since this is the first rate drop over the last few years, several of the best banks have been able to maintain good rates on savings accounts to keep bringing in new customers.

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 nationwide accounts offering around 5% to 5.55% APY. 

Rates from numerous banks started dropping in anticipation of the Federal Reserve‘s first rate cut of the year. After September’s rate cuts, more high-yield savings account rates fell, too. 

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

Combo savings/checking offers keep high rates on the table

To continue bringing in new customers, some banks have turned to combination savings accounts/checking 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, U.S. Bank and TD Bank have similar offers.

When paired with U.S. Bank Smartly® Checking or the U.S. Bank Safe Debit account, the U.S. Bank Smartly® Savings Account pays up to 4.10% APY. You can earn 4.10% APY by keeping $25,000 or more combined across your eligible accounts. On its own U.S. Bank Smartly® Savings Account only offers up to 0.26% APY.

TD Signature Savings pays 0.01% to 4.00% APY. To earn a relationship rate, you must have an eligible TD Bank account like 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 on that account. To earn 4.00% APY — the highest savings account rate — you also need to maintain a minimum daily balance of $100,000 or more. By itself, TD Signature Savings only offers 0.01% to 0.05% APY.

Keep in mind possible Fed rate cuts are on the horizon

At the September Fed meeting, the Federal Reserve updated its Summary of Economic Projections with projections of more rate cuts up until 2026. This likely will result in further rate drops for savings accounts across the board.

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

You could switch banks if your savings account rate drops significantly, but chasing rates may take more time and effort than it’s worth, so it isn’t recommended to change banks every time rates decline. Since high-yield savings accounts typically pay better than average savings account rates regardless of the economic environment, you might be better off opening an account with a well-rounded bank you like. 

If you’d rather maintain the same rate for a period of time, the best CDs may be a better fit for you. However, keep in mind CDs do not offer as much flexibility as savings accounts and charge early withdrawal penalties for taking out money early.