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Average Bank Interest Rates

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

There are many types of savings accounts and other interest-earning accounts offered by banks and credit unions today. Here are the current average bank interest rates for some of the more widely available products. The averages are based on annual percentage yields (APYs) collected from nearly 7,000 bank and credit union accounts – including about 5,600 Federal Deposit Insurance Corporation (FDIC)-insured banks.

Savings account yields, while historically low, can still vary widely among banks and credit unions. In general, the larger the bank, the less you may earn on your savings than you would if you shopped around for a better rate. While you might need a local bank for checking and a surcharge-free ATM, there’s no particular reason your savings needs to be languishing in a low-yielding account there as well. Shopping for a higher yielding account online is a relatively effortless way to find online banks that are paying much more in interest for the same type of savings products.

Average bank interest rates of select major banks

Bank

Interest Checking

Savings

MMA

1-Year CD

3-Year CD

Bank of America

0.01

0.03

0.02

0.05

0.55

Chase

0.01

0.01

N/A

0.02

0.45

Wells Fargo

0.01

0.01

0.03

1.25

1.10

Citibank

0.01

0.04

N/A

0.25

1.00

U.S. Bank

0.01

0.01

0.05

0.10

0.35

PNC Bank

0.01

0.01

0.09

0.15

1.25

TD Bank

0.03

0.05

0.15

0.20

0.60

KeyBank

0.01

010

0.12

0.25

0.20

Bank of the West

0.01

0.01

0.29

0.11

0.55

M&T Bank

0.01

0.02

0.05

1.40

2.25

Regions Bank

0.01

0.01

0.01

2.00

0.30

Source: DepositAccounts.com
Rates as of April 2019
Rates based on a $20,000 balance or deposit.

Credit unions will often pay more for your deposits than commercial banks. Below is a snapshot of average credit union and bank interest rates in April 2019. In the interim, interest rate hikes from the Federal Reserve mean average bank interest rates are even higher now, particularly for certificates of deposit (CDs).

Average bank interest rates of select products

Product

Credit Union APY(%)

Bank APY (%)

Interest Checking

0.12

0.14

Savings

0.17

0.19

MMA

0.36

0.25

1-Year CD

1.40

1.10

3-Year CD

1.96

1.56

Source: National Credit Union Administration, April 2019.

Recent increases in various bank account rates

Interest checking.Rates on checking accounts are never going to be exciting. The core purpose of checking accounts is to provide security and accessibility of your cash, and sometimes offer modest interest on your funds. But even these rates have been ticking up slightly in 2018, to an average of 0.17% in September 2018. But some banks will offer much higher interest rates than the average if you’re willing to meet certain conditions. Minimum balances are often required to either earn interest or avoid monthly maintenance fees.

Personal savings account rates. A savings account is a bank deposit for which there is no expiration date. Often they’re referred to as statement savings or passbook savings accounts. Unlike checking accounts, which are often used for everyday transactions and check writing, Federal Reserve regulations limit savings accounts transactions to six per calendar month. And while the average savings account APY is still only 0.23%, many banks, especially online banks, offer savings accounts with APYs of more than 2.00% annually.

Money market account rates.Money market accounts embody characteristics of both checking and savings accounts. They’re similar to savings accounts in terms of offering higher yields than checking accounts, and similar to checking as they typically offer limited check writing (though still subject to six transactions as other savings products). Most money market accounts have minimum balance requirements. Although the average money market account rate is 0.30%, we’ve seen APYs from some banks in excess of 1.00% annually.

CD rates.Certificates of deposit often offer the best interest rates from a bank or credit union. When you purchase a CD, you’re making a time deposit at an institution, and you typically cannot withdraw any of the funds until the maturity date without paying an early withdrawal penalty. CD yields are the savings vehicles showing the sharpest increases in yields, especially those with maturities of one year or more. Currently, average APYs of a 1-year CD is still about 1.00%, but banks offering the highest yields will pay you more than twice that.

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

Chris Horymski
Chris Horymski |

Chris Horymski is a writer at MagnifyMoney. You can email Chris at [email protected]

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Survey: Americans Fear the Stock Market More Than They Love Retirement

Editorial Note: The editorial content on this page is not provided or commissioned by any financial institution. Any opinions, analyses, reviews, statements or recommendations expressed in this article are those of the author’s alone, and may not have been reviewed, approved or otherwise endorsed by any of these entities prior to publication.

Gains and losses in the stock market can provoke a wide range of emotional responses, from jumping for joy to falling into a fetal position. But a recent MagnifyMoney survey found 60% of Americans feel anxiety when they think about investing in the market, and that reluctance to embrace investing may be costing them when it comes to retirement savings. Let’s take a look at why Americans dread the stock market and how they can face up to their fears.

Survey says people fear stock market crashes

The biggest reason Americans don’t like the stock market is because they are afraid they’ll lose their money in a market downturn or a crash. Our survey found that almost 61% of Americans hesitate to invest in the stock market because of a potential crash. Not every demographic feels that anxiety equally: Almost 72% of millennials worry about a crash, compared with only 56% of Gen Xers and 55% of baby boomers, despite the fact that the younger millennials have more time to absorb and make up for losses in the market.

Beyond age, gender also plays a role in shaping a person’s investing strategies. Our survey found that 59% of men were willing to accept the risk of losing money in the market if it gave them the possibility of a big windfall, while 58% of women didn’t think the loss of any money was worth investing in the market. Women also worry more about making a mistake with their investment decisions — 63% of women versus 53% of men — and are less likely to have an investment account — 44% of women have accounts versus 60% of men.

According to our survey at MagnifyMoney, more than half of the respondents have an investment account, and most of them (67%) have one thanks to their employer.

Why you need to invest in the stock market

Movies such as The Wolf of Wall Street and The Big Short may give the impression that the stock market is the exclusive playground of the privileged looking to turn their millions into billions. But the modern retirement savings landscape — specifically the shift from companies offering pension plans with guaranteed lifelong income, to employer matches on private investment accounts — makes investing in the stock market a necessity for anyone hoping to retire one day.

“Unless you are a Kardashian or the founder of a tech startup, very few people will be able to save enough money to have a secure financial future without at least some exposure to investments,” said David Rae, a CFP based in Los Angeles.

It’s not a coincidence that Americans who don’t invest in the stock market also lag woefully behind on their retirement savings. Less than half of the country’s women have an investment account, and only 36% of them report feeling on-track with their retirement savings, according to a 2018 study by Prudential. And that sense of falling behind isn’t just a feeling — a separate survey from Student Loan Hero, which like MagnifyMoney, is also owned by LendingTree, found women have saved on average only half as much as men.

Millennials who shun the stock market risk seeing their retirement dreams slip away. A report from the nonprofit National Institute on Retirement Security found that millennials as a whole have “earned about 20% less in wages, are less likely to own a home, and have accumulated about half of the wealth of their parents at the same stage in their lives.” A separate study from MagnifyMoney shows just how far this generation has to go, reporting a median savings of $23,000, instead of the $112,000 many financial experts would recommend.

In short, unless you have a trust fund or a billion-dollar idea, you can’t really afford to ignore the benefits of compound interest granted by investing and just store all of their money away in a deposit account, where inflation will almost certainly eat away most of its purchasing power over time.

How to get over the fear of investing

The thought of investing may cause a sinking feeling in most people’s stomachs, but the following advice should calm your nerves when it comes to putting money to work in the stock market.

Don’t panic when the market does

If your worst fears about the stock market are realized in the form of a recession or crash, one surefire way to make things worse is to dump all your stocks and leave the market. “Sticking to your portfolio, whether times are good or bad, is usually the right choice,” said Rae. “Buying and selling without a plan is a recipe for crappy investment returns.” Fortunately, the MagnifyMoney survey found that almost half (49%) of respondents plan to do nothing if a recession hits.

While it’s good so many people aren’t planning to ghost during a bear market, you could also start thinking of a recession as a chance to snag stocks on the cheap. “A recession is like a big sale on stocks that only comes along every few years,” said Rae. “Look to increase your contributions to your investment accounts, if you can.”

Act your age with your investments

Not only are the young blessed with wrinkle-free skin and all of their hair, but they also have the ability to maximize the return on their investments thanks to the magic of compound interest. Because time is on their side, they can afford to allocate more of their savings in stocks — where risks and rewards are both greater — than in lower-risk, lower-return bond markets, money market accounts, savings accounts or other deposit accounts.

As you get older and wiser, and closer to the big retirement date, you should rethink the makeup of your portfolio, shifting more investments to safer asset classes and away from riskier stocks. This way if the market suffers a downturn, you’re be less exposed to the damage and better able to weather the storm until good times are here again.

Don’t be afraid to ask for help

You may think you need to be rich before you need to hire a financial advisor, but there’s nothing further from the truth. Advisors aren’t free, and even the low-fee ones will charge a commission that ultimately comes from your savings, but the peace of mind and clarity you gain about your investments can be worth the money. One rule of thumb you might consider is to use a robo-advisor if you have less than $100,000 in investable assets, and pony up for a real live human advisor once your investments break six figures.

The time to invest in the market is now

Most Americans don’t like the stock market, but investing is almost a requirement if you want to retire. Fortunately, investing doesn’t have to be so scary and by taking some time to learn the basics, you’ll be well on your way toward celebrating your golden years in financial security.

Methodology

MagnifyMoney by LendingTree commissioned Qualtrics to conduct an online survey of 1,049 Americans, with the sample base proportioned to represent the general population. The survey was fielded May 13-15, 2019. Generations are defined as follows:

  • Millennials are ages 22-37
  • Generation Xers are ages 38-53
  • Baby Boomers are ages 54-72

Advertiser Disclosure: The products that appear on this site may be from companies from which MagnifyMoney receives compensation. This compensation may impact how and where products appear on this site (including, for example, the order in which they appear). MagnifyMoney does not include all financial institutions or all products offered available in the marketplace.

James Ellis
James Ellis |

James Ellis is a writer at MagnifyMoney. You can email James here

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