Will Savings Rates Keep Going Up in 2023?

Savings rates have been rising steadily since March 2022, but that could soon change. Should you switch now?

Woman holding piggybank while pointing to large coins.
(Image credit: Getty Images)

To combat inflation, the Federal Reserve has been continuously hiking interest rates in an attempt to drive spending down as consumers realize higher commercial interest rates on mortgages, credit card APRs and other loans. There is a silver lining, however — as the federal funds rate increases, interest rates on high-yield savings accounts and CDs typically do too. Offering a high APY (annual percentage yield) on accounts is an effective way for banks to compete for customers and attract deposits.  

At the latest meeting in September, the Fed decided to keep the federal funds rate steady. This pause in rate hikes means the Federal funds rate will remain at a target range of 5.25% to 5.5%, the highest it’s been in 22 years. However, the Fed did signal that another rate hike is possible before the year is through, as inflation has not reached it's 2% target.

More rate hikes could push savings rates even higher. Therefore, some experts recommend taking advantage of the best APYs before they go down. However, as inflation cools further and the Fed puts an end to raising rates, savings rates will likely level off and then decrease.

Our new comparison tool — in partnership with Bankrate — will help you find the best rates available now. 

How to find the best savings rates 

Compare high yield rates online: Online banks typically offer more generous APYs on savings accounts, so banking online could help you get the best savings rate possible. So, changing from your traditional savings account at a brick-and-mortar bank to an online one might be a good option. 

Avoid teaser rates and tiered interest rates: Teaser rates are promotional rates banks use to attract new customers, but these rates are typically short-lived. Tiered interest rates pay a different yield based on the balance in your account, but if you plan on using your savings at some point, opting for an account with a flat APY is likely a better choice. 

Take into account any fees: While high-yield savings accounts do offer higher than average APY on deposits, some have strings attached. Some high-yield accounts will have fees or balance requirements that could potentially decrease their overall value, so it's important to consider this to find the best options.  

Here are some of the best earning high-yield accounts.

Greenwood Credit Union: 5.25% APY; $1 minimum opening deposit; No monthly fee

UFB Direct: 5.25% APY; $0 minimum opening deposit; No monthly fee

Popular Direct: 5.25% APY; $100 minimum opening deposit; No monthly fee

Bask Bank: 5.00% APY; $0 minimum opening deposit; No monthly fee

CIT Bank: 5.05% APY; $100 minimum opening deposit; No monthly fee

Synchrony: 4.75% APY; $0 minimum opening deposit; No monthly fee

Citizens: 4.50% APY; $0.01 minimum opening deposit; No monthly fee

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Erin Bendig
Personal Finance Writer

Erin pairs personal experience with research and is passionate about sharing personal finance advice with others. Previously, she was a freelancer focusing on the credit card side of finance, but has branched out since then to cover other aspects of personal finance. Erin is well-versed in traditional media with reporting, interviewing and research, as well as using graphic design and video and audio storytelling to share with her readers.