Your cash savings may get a higher return but only at certain banks

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Banks are starting to pay a higher return on your cash — good news for savers who’ve seen their stockpiles languishing from a gruesome combination of low interest rates and high inflation.

However, some banks are moving faster than others. Some, particularly traditional brick-and-mortar shops, may not budge for a while.

At least 10 banks have raised interest rates on their high-yield savings accounts or money market deposit accounts since mid-April, according to data compiled by Bankrate.

They include: American Express National Bank, Barclays Bank, Capital One, CIT Bank, Colorado Federal Savings Bank, Discover Bank, Luana Savings Bank, Marcus by Goldman Sachs, Sallie Mae Bank and TAB Bank, according to Bankrate. A handful of others increased yields earlier in 2022.

The rates are still relatively low — none yet pays over 1%. Most are in the range of roughly half a percent up to 0.80%, according to Bankrate data.

But the highest-yielding accounts pay about 10 times more than the national average, which is 0.06%, according to Greg McBride, chief financial analyst at Bankrate.

And consumers’ returns are likely to climb steadily higher as the Federal Reserve continues to raise its benchmark interest rate to curb inflation. The central bank cut that rate to rock-bottom levels in the early days of the Covid-19 pandemic to help prop up the economy.

“If the Fed ends up being as aggressive as they’re expected to be, the top-yielding savings accounts could clear 2% later this year,” McBride said.

“It’s the only place in the world of finance where you get the free lunch of higher return without higher risk,” he added. “It’s pure gravy.”

Emergency savings

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Financial advisors often recommend savers park their emergency funds in these types of accounts. Funds are safe (deposits are insured by the Federal Deposit Insurance Corporation) and liquid (they can be accessed at any time).

Savers should aim to have several months of household…

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