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

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.”

Financial advisor Winnie Sun, co-founder of Sun Group Wealth Partners in Irvine, California, recommends saving at least six months of crucial living expenses (shelter, food and medication costs), plus an additional three months for each child in the household.

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Consumers don’t need to move all their funds, either. They can keep managing their day-to-day finances (their checking accounts, for example) at their current bank to avoid the hassles of switching, and open an account at a new bank solely for emergency funds, McBride said.

Not every bank is raising their payouts or doing so at the same pace.

Largely, the ones that have increased their account rates (some have done so multiple times in…