Personal Finance

How Much Can You Still Make on a High-Yield Savings Account in 2025?

Maurie Backman

Published: January 8, 2025 9:45 am

 24/7 Wall St. Key Points:

• Despite some rate cuts, high-yield savings accounts are still paying generously.
• Consider moving more money into savings to capitalize on today’s strong rates.
• For more guaranteed income, look at a CD ladder.
• The best high-yield savings accounts are paying way more than most Americans realize, with some offering cash bonuses for new accounts. Click here to see our top pick today. ^(Sponsored)

Given the rip-roaring year the stock market just had, a lot of people are gearing up to invest more in 2025 — especially given that savings account rates have fallen in recent months.

To be clear, that was expected to happen. The Federal Reserve was due for some rate cuts once inflation started to slow down. And not surprisingly, it lowered its benchmark interest rate during its last three consecutive policy meetings.

But even though savings accounts are paying a bit less right now than they were a few months ago, they’re still paying generously. And you may be surprised at how much money you can make from a high-yield savings account in 2025.

Why it pays to boost your savings

If your goal is to get rich or build up a solid retirement nest egg, then a savings account isn’t really the best home for your money. You can do pretty well in a savings account today, but over time, the stock market is likely to generate significantly higher returns.

It’s like financial guru Dave Ramsey says. “A savings account is for savings. You’re not trying to make money on this money. You’re trying to save for specific purposes like emergencies, a down payment on a house, a family vacation, or even next year’s Christmas fund.”

But still, that doesn’t mean there’s no benefit to having a savings account and increasing your balance in one. If you have enough cash on hand to cover three months of essential bills, working your way up to a six-month emergency fund buys you more protection from unplanned bills or an unwanted layoff.

And also, if you’re in or near retirement, putting more money in cash is a great way to diversify and generate stable income in the form of interest. In fact, if you’re on the cusp of retirement or have already left the workforce, it’s smart to have one to two years’ worth of living expenses in cash in case the market implodes and tapping your investment portfolio becomes less desirable.

How much can you make on your savings?

The amount of money you can make on a high-yield savings account in 2025 will hinge on three factors:

• Your balance
• Your bank
• The extent to which the Fed continues to cut rates in the coming year

As a basic example, if you have $20,000 in savings at a 4% APY that holds steady throughout 2025, you’re looking at earning $800 in interest. If you have $30,000 in savings at a 4% APY that doesn’t fall in 2025, you’re looking at $1,200.

But of course, the one thing everyone should know about savings accounts is that your APY is never set in stone. It can rise and fall with market conditions. And given that more rate cuts are expected out of the Fed this year, the APY you start off with isn’t necessarily going to be the same one you get to enjoy between now and December.

If you want to lock in a more predictable amount of interest on your cash, open a CD instead of sticking to a high-yield savings account. If you lock in a 4% APY on a 12-month CD, that rate is set for a full year until your CD matures. You can also look at a CD ladder for more flexibility with your cash.

But one thing you don’t want to do is put your emergency fund into a CD. You need that money available in case you lose your job or you need to replace your roof.

Similarly, be careful with CDs if your money is earmarked for a specific goal. You might think you’re safe to put the down payment you’re saving for a home into a 12-month CD because you have no plans to buy a place until mid-2026. But if plans change and you find the perfect home this September, that puts you in a pickle.

The good news is that even though your savings account APY isn’t guaranteed, you can start off with a solid rate now if you shop around for a great offer. But also, keep an eye on your savings throughout the year, because there’s no penalty for switching banks if you find a better rate elsewhere.