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Which type of savings account currently earns the most interest?

CDs and high-yield savings accounts currently earn much more interest than regular savings accounts do. Getty Images

After signs that inflation was finally cooling, it ticked up 3.2% again in July. And while it's still too early to tell if that was an anomaly or a sign of further difficulties to come, it wasn't the news most experts and economists were hoping for. After all, high inflation generally means high interest rates meant to lower it. And that makes borrowing for everything from credit cards to mortgages and personal loans more expensive. 

With higher rates, however, come higher returns on savings accounts. To get the most out of your money, especially in today's environment, it helps to know what some of the popular savings accounts are currently earning. Start by researching your high-yield savings and certificates of deposit (CD) account options here now to see what you could be earning today.

Which type of savings account earns the most interest?

Here are three types of savings accounts and what account holders can expect to earn from each.

Certificates of deposit (CDs)

CD accounts are currently offering some of the highest interest rates out there, particularly if you're willing to open one with an online bank or lender. It's not too difficult to find multiple lenders offering CDs with interest rates of 5.20% or higher, many of which come with minimal or no fees. And while, historically, long-term CDs generally offered higher rates, savers may be better served by opening a short-term CD now, instead.

That said, it will cost you something to earn that higher rate — specifically the flexibility you may be used to with a regular savings account. To obtain the full interest on a CD, savers will need to lock away their funds in the account for the full CD term. If they withdraw it early they'll generally need to pay a penalty, which can be some or all of the interest earned to that point in time. 

But if you're willing to lock away a portion of your money (or simply want to "ladder" a few CDs so that they expire at different times, giving you more flexibility), now is a great time to open a CD and start earning the most money you can.

Get started here now!

High-yield savings accounts

High-yield savings accounts are exactly what their name implies: savings accounts that earn a high yield on your money. While not precisely what can be earned with a CD, high-yield savings accounts are also offering exponentially higher interest rates in today's market. You can find multiple accounts offering more than 4.50% APY right now. And if the Federal Reserve raises rates again in September, as some are now predicting, rates on these accounts will likely go even higher.

While they may not be as high as CDs, high-yield savings accounts offer users much more flexibility. as they operate identically to regular savings accounts, albeit with that higher interest rate. Many online banks will even provide debt cards to maintain the ease of use accountholders are used to with their regular banks. And rates on these accounts are variable, making them especially attractive in a market where rates continue to head upward.

Explore your high-yield savings account options here to learn more.

Regular savings accounts

Regular savings accounts offer users the simplicity and convenience they have long been accustomed to. That said, they're a poor choice to invest your money in today's market, as the average interest rate on these types of accounts, according to the FDIC, is just 0.42%. Or, to put it another way, you can earn almost 11 times more with a high-yield savings account or around 12 times more with a CD. 

So, by keeping your money in a regular savings account, you're losing money. While the access you get with a bank with a physical location versus an online one may be favorable, chances are that you'll be better served with the additional money earned by opening a CD or high-yield savings account, instead.

The bottom line

While there aren't many silver linings to stubborn inflation and high interest rates, savers can at least earn significantly more on their money than they could have just a few years ago. To effectively do so, they should research their options and find the best savings account type (with the highest interest rate) for their needs and goals. While regular savings accounts won't likely make the cut, savers can earn a nice return on their funds by opening a CD, high-yield savings account or both right now. Get started here today!

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