August 28, 2019

Average Bank Interest Rate

Read more about Bank

Are you getting the best interest rates available? Maybe not, if your money sits in a traditional savings account. Read our guide on average interest rates for more.

Average Rate CategoryInterest Rate
Average Checking Account Interest Rate0.06%
Average Savings Account Interest Rate0.09%
Top Online Savings Interest Rate2.45%
Average Interest Rates for a 1-Year CD0.65%

Average Interest Rates Today

Bank interest rates vary by company, type of bank, and type of account. Most banks offer several interest-growing accounts, including:

  • Checking Accounts
  • Savings Accounts
  • Money Markets
  • CDs

Keep reading to see how much interest you can earn with each.

What is the average interest rate on a checking account?
The average checking account interest rate is 0.06%. This is a 0.01% increase from 2018, and a 0.02% from 2014.

High Yield Checking
Some banks currently offer checking accounts with 1.00% APY for high balances. Check out our guide for high yield checking accounts to learn more.

What is the average credit union interest rate on a checking account?
Credit unions offer an average interest rate of 0.12% on checking accounts, which is 0.06% higher than checking accounts opened at a regular bank.

A credit union is a private nonprofit banking company that requires membership in order to open an account. Joining a national or local credit union can often give you access to higher interest rates and lower fees.

What is the average interest rate on a savings account?
The average savings account interest rate is 0.09%. This is a 0.02% increase from 2018, and a 0.03% increase from 2014.

What is the average credit union interest rate on a savings account?
The average credit union savings account interest rate is 0.17%, which is 0.08% higher than the average savings account at a regular bank.

Online Savings Accounts
To find the highest interest rates, check out our guide to online savings accounts. Online banking can provide up to 2.45% APY depending on your balance.

What is the average interest rate on a money market account?
The average money market account interest rate is 0.18%. This is 0.07% higher than the rate in 2018, and 0.10% higher than 2014.

What is the average credit union interest rate on a money market account?
The average credit union interest rate on a money market account is 0.36%. This is nearly double the average rate of accounts in traditional banks.

What is the average interest rate on a CD?
Average CD interest rates are:

AccountInterest Rate
1-Month CD0.12%
3-Month CD0.22%
6-Month CD0.41%
1-Year CD0.65%
2-Year CD0.84%
3-Year CD0.97%
4 Year CD1.07%
5-Year CD1.23%

What is the average credit union interest rate on a CD?
Credit union CDs offer the following rates:

AccountInterest Rate
3-Month CD0.56%
6-Month CD0.92%
1-Year CD1.40%
2-Year CD1.74%
3-Year CD1.96%
4-Year CD2.16%
5-Year CD2.42%

CDs offer higher interest rates than traditional savings account. For a list of the best high interest CD options, view our guide here.

Historic Interest Rates

Interest rates change over time for all financial accounts. Keep reading to see how the interest rates compare over the last ten years.

What was the average checking account interest rate in 2009?
The average checking account interest rate in 2009 at a regular bank was 0.13%, which is 0.07% higher than what it is today.

What was the average savings account interest rate in 2009?
The average savings account interest rate in 2009 was 0.21%, which is 0.12% higher than what it is today.

What was the average money market interest rate in 2009?
The average money market interest rate in 2009 was 0.40%, which is 0.22% higher than the average rate today.

What was the average CD interest rate in 2009?

AccountInterest Rate
3-Month CD0.52%
6-Month CD0.77%
1-Year CD1.08%
2-Year CD1.49%
3-Year CD1.74%
4-Year CD1.98%
5-Year CD2.21%

What was the average checking account interest rate in 2017?
The average checking account interest rate in 2017 was 0.04%. They increased to 0.05% in April 2018.

What was the average savings account interest rate in 2017?
The average savings account interest rate in 2017 at a regular bank was 0.06%, which is 0.03% lower than the average rate today.

What was the average money market interest rate in 2017?
The average money market interest rate in 2017 was 0.08%, which is 0.10% lower than the average rate today.

What was the average CD interest rate in 2017?

AccountInterest Rate
3-Month CD0.09%
6-Month CD0.15%
1-Year CD0.25%
2-Year CD0.40%
3-Year CD0.53%
4-Year CD0.64%
5-Year CD0.83%

You can find an updated list of bank account promotions here.

Frequently Asked Questions

What's the difference between the APR (interest rate) and APY (annual percentage yield)?
The interest rate is the base rate of return you will receive on the account each year. While the APY is similar, it may be slightly higher depending on the frequency of the compounded interest.

For example, a $10,000 investment with a 2% APR will earn $200.00 of interest in 1 year. That same investment with a 2% APY compounded monthly will earn $201.81 in 1 year.

In this case, the interest that you earn each month is added to the balance of the account. Future interest is paid on the increased amounts each month, which results in higher returns.

How can I find the best savings account interest rate?
Savings account interest rates depend on the bank you choose and your balance. Opening an online savings account will yield much higher interest rates than what you would receive at a local bank.

Online savings accounts offer an average interest rate of 2.2% compared to the 0.9% average rate at standard banks. View our list of high interest savings accounts here.

How do banks determine interest rates on savings accounts?
Banks loan the money that you place in your savings, money markets, and CDs to customers. They then share the profits earned on the loans in the form of interest.

Banks may raise their interest rates if they are doing well, and may lower their rates to protect their profits.

Is interest paid monthly or annually?
Typically, banks offer interest compounded daily, monthly, or quarterly. You'll earn the most money with daily compounding, but many banks primarily offer monthly compounding on savings accounts.

How is interest earned on CDs?
Some CDs offer interest compounded monthly. In addition, many allow you to add that interest to your CD balance. As the CD balance increases, you will earn more interest.

CDs and Interest
CDs are short-term savings options that may not receive the full advertised APY.

For example, if you purchase a 3-month CD with a 1.5% APY, you would only earn that full 1.5% if you continuously purchased the same 3-month CD over the course of a year. If you only bought one 3-month CD, you'd earn a rate of 0.37%.

Bottom Line

Interest rates vary significantly by bank. An online account is your best way to earn large amounts of interest. If you stick with brick-and-mortar banks, shop around to find the highest APY while keeping your money in a convenient nearby location.

More from CreditDonkey:


Average Credit Card Interest Rate


Best CD Rates


Best Money Market Rates

More Articles in Money Tips

Bank

Chase Order Checks

Running low on your checks from Chase? Read this to learn how to reorder your checks.
more Bank

Leave a comment about Average Bank Interest Rate?

Name
Email (won't be published)


December
12
2019

Best Money Saving Apps

Even with the best intentions, you may find yourself spending before saving. But these easy-to-use apps can help. Read on to see which money savings app can help you reach your savings goals.
More Articles in Money Tips








About CreditDonkey®
CreditDonkey is a bank comparison website. We publish data-driven analysis to help you save money & make savvy decisions.

Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

†Advertiser Disclosure: Many of the card offers that appear on this site are from companies from which CreditDonkey receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). CreditDonkey does not include all companies or all offers that may be available in the marketplace.

*See the card issuer's online application for details about terms and conditions. Reasonable efforts are made to maintain accurate information. However, all information is presented without warranty. When you click on the "Apply Now" button you can review the terms and conditions on the card issuer's website.

CreditDonkey does not know your individual circumstances and provides information for general educational purposes only. CreditDonkey is not a substitute for, and should not be used as, professional legal, credit or financial advice. You should consult your own professional advisors for such advice.