Some savings accounts now pay more than 3% annual percentage return, or APY, after recent Federal Reserve rate increases. This rate is one of the highest rates you will find right now for a savings account, so it’s worth looking around.

Learn why rates are rising and how you can get the highest returns for your money.

Is 33% a high rate?

Yes, in a word. According to the Federal Deposit Insurance Corp, the national average savings rate is 0.221% APY as of October 2022. This is quite a difference from the 0.06% it was in January 2022. High-yield accounts earn much more than the average. The highest-yield accounts currently earn over 3%.

What does this mean for you? Let’s suppose you have $5,000 saved in a savings account earning 0.21% APY. After a year, it will grow by just $11. If you put the funds in a high yield savings account earning 3%, your bank balance will grow by approximately $153. This is a substantial amount of money for little effort.

Your money earns interest over time. These earnings, also known as compound interest can help boost your balance even more quickly. Your balance will grow faster if you have a higher rate and a longer time period.

Why is APY growth increasing?

Inflation is partly responsible for the increase in APYs. Inflation can be high. The Federal Reserve can help to bring it down. They can increase the federal funds rate, which banks borrow money from other banks, when this happens. The Fed raised the federal funds rate several times in 2022.

The rate increases are not likely to stop. In a press release, the Fed stated that in November the Fed had said that the committee setting the rate “anticipates” that continued increases in the target range would be appropriate to lower inflation to the committee’s goal.

Higher rates can increase borrowing costs and slow down spending. This can lead to higher inflation. Higher rates can also lead to higher yields for savers. This is what has happened thanks to the Federal Reserve, and old-fashioned competition.

Accounts with the highest rates have a tendency to raise their APYs when their competition increases rates. These accounts have increased rates multiple times in the past few months. This is why we are at a time when the highest yields are above 3%. This is a significant increase from January 2022 when rates at the highest quality earned 0.50% APY.

How do I locate top savings accounts?

It is unlikely that you will find the best rates at a large bank nearby. You might consider other options, such as savings accounts that are only available online. Why? Why?

Can I keep my money safe with an online high-interest account?

Online banks have the same federal insurance as traditional banks. Funds in online banks can be insured up to $250,000 per depositor by the FDIC. Credit union funds are federally insured through the National Credit Union Administration. Your money would still be available to you if the institution failed.

High yield savings accounts can also be offered by financial technology companies. To hold customer deposits, these companies often partner with FDIC-insured bank to ensure that the funds are federally insured. To find out if funds have federal insurance, please check the website of the company before you sign up.

What fine print do I need to be aware of?

Be sure to read the conditions and limitations before you sign up for a savings account. Some savings accounts offer rates up to 3% APY but limit the maximum APY to $500. Higher balances than the limit could earn a lower interest rate. Look elsewhere if the limit is less than you would like to save.

To earn the highest savings rate, other institutions may require you to open a linked checking bank account. You should look for accounts that are easy to navigate or those with no hoops.

Are there any fees?

In theory, you won’t have to pay any fees back to the bank. Some banks charge $15 per month for fees, but they will waive these fees if you maintain a minimum balance. Some banks won’t charge fees but require a minimum balance to open an account. Savings accounts that earn strong yields and don’t charge monthly fees are the best.

Do you know of any other high-yield savings options?

Your money picture may not include a high-yield savings bank. A certificate of deposit is one of the best ways to earn interest.

CDs don’t allow you to withdraw funds at a particular time without paying a penalty. This can often be up to a year. However, the tradeoff is accessibility and high yields. For one-year terms, many CDs offer rates as high as 4% APY. A high-yield savings account, even though the yield may be lower, might be the best option if you feel you will need to access your money more often.