Savers start reaping rewards as online banks goose rates

The Federal Reserve started raising interest rates three years ago. Savers are finally starting to reap meaningful benefits, but only if they're willing to shop around.

The top money-market accounts are now giving consumers annual percentage yields of 2.25 percent or more, according to Bankrate.com. That's enough to keep up with the Fed's inflation target of 2 percent.

Typical Americans, though, are still getting pennies on their savings. The average money-market account is yielding just 0.22 percent, Bankrate's weekly survey found Wednesday. That's up 0.02 points since June.

Consumers can do much better if they're willing to go through the hassle of moving their money. The very highest rates on Bankrate tend to come from smaller banks seeking capital. The top money-market rate on the platform is 2.4 percent. Rates on certificates of deposit can approach 3 percent on one-year CDs, and can go even higher if you're willing to lock up your money for at least two years.

A few of the banks offering more than 2 percent on savings deposits are higher-profile brands trying to win new business. TIAA Bank offers an account yielding 2.15 percent. State Farm Bank is offering 2.1 percent, while Barclays and Goldman Sachs's retail-banking unit Marcus each offer 2.05 percent. TIAA requires a minimum deposit of $5,000, while the other banks don't.

Investing startup Robinhood Financial is entering the arena as well, with a new checking and savings product that promises a 3 percent interest rate. Robinhood's offering, however, isn't a traditional banking product. It's not insured by the Federal Deposit Insurance Corp., which backs bank deposits up to $250,000. Instead, it's insured for the same amount by the Securities Investor Protection Corp. as brokerage accounts are.