Today's Two Best Savings Accounts Guarantee Their Top Rate for Up to 5 Months

The full article continues below these offers from our partners.

You Can Now Lock in a Tip-Top Savings Account Rate for Several Months

Putting some of your surplus cash in a top-paying, high-yield savings account is always a good move. But right now, two nationwide banks are sweetening the deal considerably. Not only that, but they're two banks that are already paying the highest rates in the country.

While their offers last, Flagstar Bank and Poppy Bank are adding special rate guarantees to their nation-leading returns. Flagstar is paying the top rate of 5.55% APY, which currently comes with a five-month rate lock. However, this offer is only suited to those who can keep a large savings balance, as Flagstar requires you to maintain a balance of at least $25,000 to earn the 5.55% rate.

Poppy Bank, on the other hand, is paying a slightly lower 5.50% APY with a rate guarantee of three months. But you can earn this rate with just a $1,000 minimum balance.

While not unheard of, rate guarantees on savings accounts are rare. By definition, savings accounts have a variable rate, meaning the bank or credit union can change the account's annual percentage yield (APY) at any time. They don't even have to give you a warning.

Why Today's Savings Accounts Are Paying Record Rates—But Could Soon Start Falling

With savings account rates reaching 5.50% and beyond, there's never been a better time in the last 20 years to hold money in a high-yield savings account. Today's nation-leading rate of 5.55% is especially remarkable when you consider that at the start of 2022, the top nationwide rate was just 0.70%.

That 5.55% peak comes compliments of the Federal Reserve. This is because the central bank dramatically raised the federal funds rate to fight inflation that had reached a 40-year high. With 11 rate hikes between March 2022 and July 2023, the Fed raised its benchmark rate by a cumulative 5.25 percentage points, taking it to its highest level since 2001.

This is important for savers because the fed funds rate directly influences how much interest banks and credit unions are willing to pay for savings, money market, and certificate of deposit (CD) accounts. When the fed funds rate is high, interest rates for bank customers are elevated as well.

But now, inflation has cooled. While it's not yet at the Fed's 2% target level, the latest reading was just 3.0%, as measured by the June Consumer Price Index (CPI) released on July 11. This has not only let the Fed take its foot off the gas on rate hikes, but it moves the central bank toward a phase of cutting rates.

When Will Savings Account Rates Start Dropping?

Financial markets currently expect the Fed to announce on July 31 it will hold rates steady one more time. But by the next meeting, which will conclude Sept. 18, investors are overwhelming predicting the Fed will make a rate cut of 0.25 percentage points. In addition, a majority of investors believe a second rate cut—or even a third—will be implemented by the end of 2024.

Though the top savings account rate and the fed funds rate likely won't move in lockstep, two Fed rate cuts would lower the fed funds rate by 0.50 percentage points. That would push the best savings account rate somewhat lower this fall, perhaps even below 5% later this year.

This reinforces our recommendation that locking in an outstanding APY—either with one of the guaranteed savings account rates above or one of the nation's top-paying CDs below—is a smart financial move right now.

For a Longer Rate Lock, Consider a Top-Paying CD

If you can commit to not touching some of your money for longer than five months, it's an excellent time to open one of the nation's best CDs—before rates start coming down. While rates for new CDs will fall along with the fed funds rate, a CD you open now will have a guaranteed return that can't be changed.

With our daily ranking of the best CD rates, you can lock in a rate of 5.30% to 5.51% with the best 6-month CDs or 5.25% to a whopping 6.00% with a top 1-year CD. If you can commit some of your savings even longer, numerous offers pay 5.00% or higher on terms of 18 months, 2 years, or 3 years.

The top rates on 4-year and 5-year CDs are meanwhile in the mid to upper 4% range, but they will guarantee your rate until 2028 or even 2029.

How We Find the Best Savings and CD Rates

Every business day, Investopedia tracks the rate data of more than 200 banks and credit unions that offer CDs and savings accounts to customers nationwide and determines daily rankings of the top-paying accounts. To qualify for our lists, the institution must be federally insured (FDIC for banks, NCUA for credit unions), and the account's minimum initial deposit must not exceed $25,000.

Banks must be available in at least 40 states. And while some credit unions require you to donate to a specific charity or association to become a member if you don't meet other eligibility criteria (e.g., you don't live in a certain area or work in a certain kind of job), we exclude credit unions whose donation requirement is $40 or more. For more about how we choose the best rates, read our full methodology.