What's a good high-yield savings account interest rate after the Fed cut rates?

Savers can still earn a respectable return by putting some of their money into a high-yield savings account. Milan Markovic/Getty Images

High-yield savings accounts have historically offered savers two primary benefits – an elevated rate of return on their money and the flexibility to bank as they would with a traditional account. 

Unlike a traditional account, with a rate comfortably under 1%, high-yield savings account rates were much higher, particularly during the high inflation/high interest rate period of recent years. At the same time, unlike a certificate of deposit (CD) account, savers could maintain access to their money as needed without having to lock it away for a set period of time.

But the interest rate climate is changing again. Not only did the Federal Reserve issue a rate cut in September, but two others are now widely anticipated for when the central bank meets again later this month and in December. That will further shake up the savings climate and could mark the end of this cycle of big returns for savers. At the same time, rates here are still competitive and favorable for many of those searching for ways to earn easy interest on their money.

Before depositing any money, however, it helps savers to understand what a good high-yield savings account interest rate is considered to be now, in this unique climate. Below, we'll break down what to know before transferring any money.

See how much more interest you could be earning with a top high-yield savings account here.

What's a good high-yield savings account interest rate after the Fed cut rates?

High-yield savings accounts aren't as profitable as they were in recent years. For example, some savers in April 2024 may have been eligible for a rate of 6% on their money. Thanks to a much cooler inflation rate and multiple Fed rate cuts, however, accounts like that are now largely unavailable.

But that doesn't mean savers can't still find competitive homes for their money.

Savers can still find rates in the 4.20% to 4.30% range on these accounts now. And, if they take the time to shop around for accounts with online banks, which tend to offer more competitive rates than banks with physical branches, they may be able to find an even higher rate. In other words, a high-yield savings account rate of 4.20% or higher can be considered a "good" one currently.

But it's considered even better when stacked against traditional savings accounts. Those accounts, according to the FDIC, have an average rate of just 0.40% currently. Put another way, a high-yield savings account is 975% more profitable (comparing the 0.40% to the 4.30%). 

And unlike CD accounts, which have rates maxing out just slightly higher (around 4.50%), savers won't need to lock their money away for months or even years. They won't need to pay any early withdrawal penalties either to regain access, as the money here will be as readily available as it's always been.

Get started with a top high-yield savings account here.

The bottom line

While the high-yield savings account rates of the recent past have since become unavailable, savers can still do well by earning a good rate with one of these account types now. That said, rates here are variable and subject to adapting to market conditions, meaning they could decline further if the rate climate continues its downward trend. Keep that in mind, then, when comparing these accounts against CDs. No matter which you ultimately decide on, however, just try to avoid keeping money in a traditional savings account. With lucrative alternatives still available, you're essentially losing money by keeping any sizable portion of your funds there instead.

Edited by Angelica Leicht