Even with the Fed rate cut, smaller banks are still holding onto savings accounts paying 5% APY

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• The Fed meeting last month resulted in a rate drop for the first time in four years.
• Some major online banks, like Capital One 360, Ally, and BMO Alto, have already dropped rates.
• To keep earning a high rate, you could lock in a high-yield CD or switch banks if your rate drops a lot.

On September 18, the Federal Reserve announced it was dropping its rates by 50 basis points. Several major banks, including Capital One 360, Ally, and BMO Alto, responded by dropping their high-yield savings account rates.

It's not as easy to find 5% interest savings accounts as it was before the Fed meeting. However, there are ways you can navigate savings rate declines to keep earning a high interest rate for a bit longer.

Savings account interest rate drops

If you're using a major online bank to earn a high interest rate on your savings account, you might be disappointed by the recent Fed interest rate cuts. Many popular brands have dropped rates on high-yield savings accounts recently. Some banks have larger rate drops than others, though.

The BMO Alto savings account, which previously offered a 5.10% annual percentage yield, recently dropped its rates to just 4.60% APY — still good, but nowhere near what it used to be.

Capital One 360 and Ally didn't drop their rates as drastically, but their rates dropped nonetheless. Capital One 360 Performance Savings fell from 4.25% APY to 4.10% (rate as of 9/27/24) APY, while Ally lowered its savings account rate from 4.20% to 4.00% APY.

Other major banks, credit unions, and fintech companies, such as Betterment, Discover, CIBC USA, Navy Federal Credit Union, and Marcus by Goldman Sachs, have seen high-yield savings account and CD rates drop in the last two weeks.

What banks are still offering competitive savings account interest rates?

Pibank, a small online bank, has the highest savings account interest rate. It pays 5.50% APY on Pibank Savings. Pibank has no monthly service fees and has a $0 minimum opening deposit, but it does require you to take money in and out of your account through wire transfer, which can be expensive. It doesn't let you use transfer services like Zelle.

Even with recent rate changes, it's still possible to get a high interest rate on your savings account. If your bank dropped its savings rates and you want to transfer your money to a higher-interest account, smaller online banks and credit unions might have what you're looking for.

If you want an account that's easier to transfer money in and out of, we've made a list of some nationwide banks and credit unions currently offering high-yield savings accounts with interest over 5%. 

Account	APY (Annual Percentage Yield) Accurate as of 10/02/2024	Minimum Opening Deposit
LendingClub LevelUp Savings Account	up to 5.30%	$0
Newtek Bank Personal High Yield Savings Account	5.25%	$0
BrioDirect High-Yield Savings Account	5.15%	$5,000
Western Alliance Bank High-Yield Savings Premier	5.11%	$500

Should you switch high-yield savings accounts?

If your high-yield savings account recently lowered its rates, switching to a higher-paying bank might be a good call. But keep in mind that all high-yield savings accounts come with a variable interest rate, so your interest could change at any time.

Upcoming Federal Reserve meetings might result in even more rate cuts before the end of the year. Jumping to a new account every time your rate drops might lead to you spending a lot of time researching and switching banks. And the highest-rate banks might come with frustrating downsides, such as a lack of access to your funds or monthly service fees.

If your high-yield savings account interest rate drops, consider what other aspects of the account you like when deciding whether to change accounts and decide whether the rate drop is large enough to put in the extra time required to switch.

If you won't need your savings for a while, you might prefer a CD. CDs offer a fixed interest rate for their term lengths. If you open a 1-year CD, your interest rate will stay the same for the whole year. In exchange, you'll be penalized for withdrawing money early. There aren't many CDs offering 5% interest now, but you still have some options if you want to lock in a good rate.