How to Compare Bank Savings Interest Rates

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When you put money in a saving account, you are basically loaning the money to the bank so the bank can make loans to others. In return for using your money, the bank pays you interest based on the amount you have in your account. When you are comparing bank savings account interest rates, you need to be concerned with more than just the rate: access to your money, special preferred rates and account minimums should also factor into your decision.

Compare the interest rates offered by multiple banks. The higher the interest rate, the more interest you will earn. However, make sure that you are comparing APRs with APRs and APYs with APYs. Because savings accounts usually compound interest monthly, the APY will be slightly higher than the APR.

Check to see if any of the savings accounts have account minimum balances. Accounts with minimum balances may offer a higher interest rate, but if you do not plan to keep at least the minimum balance in the account, monthly fees will eat away at your balance.

Ask if any of the savings accounts offer tiered interest rates. Tiered interest rate savings accounts pay more interest if your account balance is higher. For example, a savings account might pay 2 percent per year if your balance is between $500 and $5,000 and 3.5 percent per year if your balance exceeds $5,000.

Ask the banks if there are any higher rates for having multiple accounts with the same bank. For example, some banks may offer a higher interest rate if you also have a checking account at the bank.

Compare how you can access your money. Some of the higher savings account interest rates may be from online-only banks. These banks can offer higher interest rates because of lower overhead costs, but you may have to have another account at a different bank to transfer money in and out of in order to access your savings account.


  • Be sure that whatever bank you choose is covered by the Federal Deposit Insurance Corporation. The FDIC protects the money in the savings account, up to the insurance limit, in case the bank fails.