Savings Rates Climb to 4.27% After Fed Hike as Big Banks Lag

The Fed reversed course, and savings yields are starting to follow

A month after the Federal Reserve raised interest rates for the first time since 2023, the top end of the savings market has moved up. The gap between banks that pay savers well and banks that pay almost nothing has also grown wider. On September 16, the Federal Open Market Committee voted unanimously to raise its benchmark rate by a quarter point, to a target range of 3.75% to 4.00%35. Before that, the Fed had held rates steady at its first five meetings of 2026718.

As of early October, the best rate without strings attached on Bankrate's list is 4.27% APY at Peak Bank. CIT Bank follows at 4.25%, and Happen Bank, EverBank and Western State Bank each pay 4.20%11. Peak Bank's own history shows how fast online lenders reacted. It paid 4.01% through late September, then raised its rate to 4.27% in the week of October 611. Promotional offers go higher. Axos advertises up to 5.00% for new customers' first six months if they link a checking account and meet deposit requirements1218.

The rate most Americans actually earn has barely changed. Bankrate puts the national average savings yield at 0.65%, up only slightly from 0.62% in August11. That is the main point of this rate cycle: the Fed raised rates for everyone, but each bank decides how much of the increase reaches savers.

Wall Street banks split along a familiar line

The sharpest contrast is between two of the country's best-known banks. Marcus, Goldman Sachs' consumer savings brand, raised its Online Savings Account by 10 basis points to 3.50% around September 18–20, two days after the Fed's decision2429. Chase Savings, from JPMorgan, pays 0.01%, a rate that has not changed since at least January29.

The FDIC call-report figures behind those advertised rates show the same gap. In the second quarter of 2026, Goldman Sachs Bank USA paid an average of 3.60% on savings and money market deposits, more than 99% of reporting banks2629. JPMorgan Chase Bank paid an average of 2.18% across all interest-bearing deposits. On savings and money market accounts it ranked ahead of only about 27% of banks29. The industry median was 1.45%29.

The two banks fund themselves in very different ways. JPMorgan holds about $2.82 trillion in deposits, and nearly a quarter of that, 23.8%, pays no interest at all29. Goldman's bank holds about $498.8 billion, and essentially none of it is non-interest-bearing29. A bank with a large branch network and a loyal checking-account base has little reason to compete on savings rates. A bank built on online deposits has to compete every day. ShopBack's comparison argues that Marcus sitting 0.40 points above the 3.10% cluster of Ally, SoFi and Capital One is a deliberate sign that Goldman wants deposits now. That reading fits the data.

Other large firms fall between these two. Morgan Stanley's E*TRADE Premium Savings pays 4.25%, but the rate is guaranteed for only six months and comes with a bonus offer1218. Citibank's comparable savings product was listed at 2.80%29. Capital One 360 Performance Savings, now the home of Discover's former savings customers, pays 3.10%. Ally and American Express are listed around 3.00%–3.10%1425. DepositQuest, the rate tracker run by Ken Tumin, reported that the five largest online banks averaged 3.14% on the Monday before the Fed met5.

One inconsistency in the reporting is worth flagging. A September guide from Wealthvieu listed the Marcus savings rate at 4.10%28. Most other trackers, including RateBrain, NerdWallet and several independent comparison sites, put it at 3.50% in late September and early October222421. Wealthvieu's own later roundup listed 3.50% and said sources ranged from 3.40% to 3.50%27. The 3.50% figure is the one to trust.

Why banks can afford to pay more, and why many don't

The numbers behind bank pricing make the argument for switching banks plain. Along with the rate hike, the Fed raised the interest it pays banks on reserve balances to 3.90%, effective September 177. A bank can earn close to 4% just by leaving cash at the central bank while paying a typical saver well under 1%. Rolling Out describes that spread as profit taken from customers who never shop around7. Treasury bills set a similar benchmark. On September 28, four-week bills yielded 3.96% and 52-week bills 4.54%, and yields had risen at every maturity1.

Economists use the term "deposit beta" for the share of a Fed move a bank passes on to depositors, and 24/7 Wall St. explains the hike through that idea1. Banks usually raise loan rates quickly and deposit rates slowly, because every increase in savings yields cuts into their margins1. CNN reported the same pattern: the biggest banks tend to be fastest to raise what they charge borrowers and slowest to raise what they pay savers. Smaller community and online banks often move first when they want deposits to fund loans5. Citizens Bank, itself a traditional lender, also cautions that standard savings accounts at legacy banks tend to adjust slowly3.

Coverage disagrees mainly on how fast and how fully rates move. Wealthvieu estimates that top online banks pass through 80% to 100% of a Fed change within 24 to 72 hours, while national traditional banks pass through 10% to 30% over several weeks6. Its own snapshot of the current fed funds range was out of date, though, so its figures are better read as rough guides6. Real examples show both speeds. A NerdWallet writer said her account's rate rose within a day of the announcement7. Marcus moved within days29. Chase did not move at all29. CIT's 4.25% headline rate is a six-month promotion tied to a promo code and a $5,000 balance. After it ends, the rate falls to 3.75%, and balances under $5,000 earn just 0.25%1721. Several high headline rates also come with conditions. Happen Bank's 4.20% requires $250 in deposits each month, and SoFi's 4.20% depends on direct deposit plus a temporary boost1418.

Even the national average is disputed

The benchmarks for an "average" savings rate don't agree. Bankrate puts it at 0.65%11. CNBC Select uses 0.37%17, and Wealthvieu cites a 0.38% national figure6. These measures use different methods, but all of them sit far below what competitive accounts pay. Either way, the best accounts pay roughly six to eleven times the typical rate. 24/7 Wall St. estimates that a $40,000 balance earns about $150 a year at the average rate and $1,200 or more in a top account1.

Where rates go from here

The Fed has signaled that this hike may not be the last. CNN reported that 16 of the 18 FOMC officials expect another increase this year5. Investopedia noted that the median dot-plot projection calls for one more quarter-point hike by year-end2. Under Chair Kevin Warsh, the Fed made the move with inflation estimated at about 3.4%, well above its 2% target, after more than five years of elevated price growth1. 24/7 Wall St. also cited Bloomberg reporting that recent data strengthened the case for raising rates again in October, though such expectations can change from meeting to meeting1.

If the Fed hikes again, my read is that the current split will deepen. Online banks and deposit-hungry Wall Street brands like Marcus and E*TRADE will keep raising rates. Branch-heavy giants with large pools of non-interest-bearing deposits will keep savings rates near zero for as long as customers stay. The certificate-of-deposit market already points to higher rates ahead. CNBC lists CDs paying up to 5.00%, with Marcus CDs reaching 4.40%23, and Investopedia's rankings include five-year terms at 4.50%2.

The direction of rates also changes the usual advice. Most savings guidance written over the past year assumed falling rates and told savers to lock in yields before they disappeared1. Now that rates are rising, a variable-rate account can rise along with the Fed, so keeping money flexible has more value than it did1. Several outlets recommend short CD ladders as a middle ground10. The practical step for savers is to check the APY they are actually earning. Rates can change without notice, and as one analysis put it, a bank's email is not the rate4. Higher interest is also taxable income, which reduces some of the gain from switching9.

Without another Fed move, this hike alone will not bring back the roughly 5% yields of 2023. What it has done is show clearly which banks pass higher rates on to savers and which keep the difference.