Even with the Fed holding rates high, the biggest banks still pay near 0% on savings, while many smaller banks offer 4% or more.

Even a $5,000 balance can earn dramatically more in a top high-yield savings account, and the gap grows as your savings increase.

You don’t need to leave your primary bank to earn more: Linking a separate savings account is easy and can reduce spending temptation.

The Federal Reserve held interest rates steady lat week—its second pause this year after three cuts last fall—signaling that savings yields are likely to stay elevated for the foreseeable future.

But a high federal funds rate doesn’t guarantee a high savings rate. Banks set their own rates, and they vary widely across the industry—often with the biggest banks paying the least.

Many savers keep their money at Chase, Bank of America, or Wells Fargo simply because that’s where they already bank. But that familiarity can come at a steep cost: All three institutions continue to pay a near-zero 0.01% APY on standard savings accounts.

At that rate, even a $10,000 balance earns just $1 in interest over an entire year.

Meanwhile, many smaller banks and credit unions are paying 4% or more on high-yield savings accounts, with the most competitive options offering 5.00% APY. Those rates may drift lower over time, but they still dwarf what the biggest banks are paying by a wide margin.

One reason for the gap is competition. Large banks already have millions of customers and steady deposits, so they don’t need to offer higher rates to attract more money. Smaller banks and credit unions, by contrast, need to attract new customers, and one way to do that is by offering competitive interest rates.

If you’re worried a smaller bank isn’t as safe, you’re not alone. However, deposits at banks are federally insured up to $250,000 per depositor, per institution through the FDIC, with credit unions offering the same protection through the NCUA. In other words, smaller institutions are just as safe—the main difference is what your savings can earn.

If you keep your savings at a big bank, you could be earning just a few dollars a year instead of a few hundred. Moving to a high-yield savings account is one of the simplest ways to close that gap.

So how much are you missing out on by keeping savings at one of the biggest banks? Even a small difference in rates can add up quickly—but the gap between near-zero and today’s top savings rates is anything but small.

The table below shows how much you would earn over one year at a 0.01% APY versus a 4% APY, depending on your savings balance. Even though you can earn as much as 5% with today’s top high-yield savings accounts, we used 4% as a more conservative comparison.

As the numbers show, someone with $25,000 in a big-bank savings account would earn just a few dollars in interest over a year. At a 4% rate, that same balance would generate about $1,000. That’s about $83 in extra earnings each month.

Big Bank vs. High-Yield: The Earnings Gap After One Year

Balance

Earnings at 0.01% APY

Earnings at 4.00% APY

Difference After 1 Year

$5,000

$0.50

$200.00

$199.50

$10,000

$1.00

$400.00

$399.00

$15,000

$1.50

$600.00

$598.50

$25,000

$2.50

$1,000.00

$997.50

$50,000

$5.00

$2,000.00

$1,995.00

Savings account rates are variable, meaning they can change over time—especially if the Fed lowers rates. But even with modest declines, high-yield accounts would still earn far more than the near-zero rates many big banks continue to offer.

Not every well-known bank pays near-zero interest. Some, including Citi, Ally, Capital One, and American Express, currently offer savings rates in the mid-3% range—far better than what Chase, Bank of America, or Wells Fargo pay. Even so, those rates still trail what many smaller banks and credit unions are offering.

If you prefer to keep your big bank for everyday banking, you can still earn a higher APY on your savings. Many people keep their checking account, credit cards, and bill payments where they are while moving some savings to a higher-yield account elsewhere.

A high-yield savings account can act as a separate place for money you don’t need every day. Linking it to your existing checking account usually takes just a few minutes, and transfers typically settle within one to three business days.

That separation can also make it easier to save. When your savings aren’t sitting next to your checking balance, you may be less likely to spend it on everyday purchases.

And moving your savings doesn’t change your protection: High-yield savings accounts are federally protected by FDIC or NCUA insurance, just like accounts at big banks.

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