A customer with $25,000 sitting in a standard savings account at JPMorgan Chase, Bank of America, or Wells Fargo will collect roughly $98 in interest over the next 12 months. Move that same balance to a high-yield online savings account at a bank like Marcus by Goldman Sachs, Ally, or Capital One 360, and the return reaches $1,000 or more, depending on the exact rate. That is not a typo. It is the gap between 0.39 percent and rates of 4 percent and above, and it has persisted for more than two years.
Scale that difference across the trillions of dollars Americans keep parked at the country’s branch-heavy institutions, and the collective cost of inertia runs into the tens of billions every year. As of mid-2026, the disconnect between what big banks pay depositors and what smaller online competitors offer remains one of the most lopsided dynamics in consumer finance. The numbers are public. The math is simple. And yet millions of households continue to leave real money on the table.
The rate gap, by the numbers
The FDIC publishes national average deposit rates on a periodic basis, and the most recently available data pegs the average savings account yield at 0.39 percent. Because the FDIC updates these figures on its own schedule, the publication date may lag the current month by several weeks. That said, the figure has barely budged for an extended period, even as the Federal Reserve has held its benchmark federal funds rate in the 4.25 to 4.50 percent range through the first half of 2026.
Meanwhile, online banks and fintech platforms routinely advertise annual percentage yields between 3.75 and 4.50 percent on FDIC-insured savings accounts, according to rate trackers at Bankrate and DepositAccounts. These institutions operate without costly branch networks and pass much of that overhead savings on as higher yields to attract deposits.
The practical difference is stark. On a $10,000 balance, the gap between 0.39 percent and 4.00 percent works out to roughly $361 per year. On $50,000, it exceeds $1,800. For retirees stretching a fixed income or families building an emergency fund, that is not a rounding error.
Where the deposits actually sit
The Federal Reserve’s H.8 statistical release, updated weekly, tracks the balance sheets of domestically chartered commercial banks. The 25 largest institutions by domestic assets hold a combined deposit base running well into the trillions. A companion data series maintained by the Federal Reserve Bank of St. Louis (FRED: Deposits at All Commercial Banks) charts how those totals have shifted over time and confirms that deposit concentration at the top of the banking system remains heavy.
The FDIC’s annual Quarterly Banking Profile reinforces the pattern. Branch-heavy banks hold a disproportionate share of total deposits relative to the rates they pay. Customers who opened accounts at a nearby branch years ago have, in overwhelming numbers, simply stayed put.
Isolating the exact dollar amount earning below 1 percent is difficult because the Fed’s aggregate data does not separate savings balances from checking, money market, or certificate of deposit accounts. The roughly $1 trillion figure referenced in the headline is derived from cross-referencing the known national average rate with the scale of savings-type deposits at large institutions, using deposit composition estimates from the FDIC’s call report data. It is a reasonable approximation rather than a single audited figure, and the true number could be higher.
Why savers stay put
If better rates are a few clicks away, why do so many depositors accept 0.39 percent? The answer is a stubborn mix of inertia, lack of awareness, and misplaced concern about safety.
A 2024 Bankrate savings survey, part of the outlet’s recurring series on deposit account behavior, found that fewer than half of American savers could identify the approximate yield on their own savings account. Many respondents assumed their bank’s rate was competitive simply because they had never checked alternatives. Others expressed unease about moving money to an institution without a physical branch, even when told the account carried the same $250,000 FDIC insurance as their current bank.
“Deposit stickiness is one of the most reliable phenomena in banking,” said Ken Tumin, founder of DepositAccounts and a longtime tracker of savings rates. Large banks count on it. Every dollar held at 0.39 percent while lent out or invested at 5 percent or more generates a wide net interest margin. Raising savings rates would compress that margin and, with it, quarterly earnings. As long as most depositors do not leave, there is little financial incentive to pay more.
Bank executives rarely state this so bluntly on earnings calls. They reference “deposit betas” and “funding cost discipline.” But the math speaks for itself: cheap deposits are among the most profitable funding sources a bank can hold, and the biggest institutions have trillions of them.
What the Fed’s next moves could mean
The Federal Reserve held rates steady at its May 2026 meeting, and the CME FedWatch tool showed futures markets pricing in modest cuts later in the year as of late May. If the Fed does begin lowering its benchmark rate, online banks will likely trim their advertised yields. But the gap with traditional banks is unlikely to close. During the last easing cycle, large banks were slow to raise rates on the way up and will have little reason to cut rates they never meaningfully increased.
That means the window for savers to capture a meaningful yield advantage, while not permanent, remains open. Locking in a high-yield savings rate or a competitive certificate of deposit now could preserve returns even if the rate environment shifts in the second half of 2026.
How to move without the headache
Switching savings accounts is simpler than most people assume. A few practical steps can remove most of the friction.
Verify FDIC insurance. Any bank advertising a high yield should be verifiable through the FDIC’s BankFind tool. If the institution appears in that database, deposits up to $250,000 per depositor, per ownership category, carry the same federal guarantee as an account at the largest bank in the country.
Compare APYs, not promotional teasers. Some banks advertise introductory rates that drop after a few months. Look for the standard annual percentage yield and check whether it applies to the full balance or only to deposits above a certain threshold.
Keep your old account open during the transition. Link the new high-yield account to your existing checking account for easy transfers. There is no rule requiring you to close one account to open another, and maintaining both for a few weeks ensures direct deposits and automatic payments continue uninterrupted.
Watch for withdrawal limits and fees. Federal Regulation D restrictions on savings account withdrawals were relaxed during the pandemic, but some banks have reimposed their own limits. Read the fine print on monthly transaction caps and any fees for exceeding them.
Consider money market funds as a complement. For balances above the FDIC insurance cap, or for investors comfortable with brokerage accounts, government money market funds have offered yields competitive with or above high-yield savings accounts through much of 2025 and into 2026. They are not FDIC-insured, but those backed by U.S. Treasury securities carry minimal credit risk.
Remember that interest is taxable. Interest earned in a high-yield savings account is reported as ordinary income. If you move a large balance and start earning significantly more interest, plan for the tax impact. Your bank will issue a 1099-INT for any account earning more than $10 in a calendar year.
$75 a month, sitting unclaimed
Every month a saver leaves $25,000 at 0.39 percent instead of 4.00 percent, roughly $75 in potential interest goes uncollected. Over a full year, that adds up to more than $900 per household. Enough to cover a month of groceries or a round-trip flight.
No pending regulation would require banks to present rate comparisons at the point of sale, and the largest institutions have no plans to volunteer the information. The burden falls on depositors to shop their own savings the way they shop for any other financial product. The data from the FDIC and the Federal Reserve makes the case plainly: the money is there to be earned. The only thing standing between most savers and a significantly better return is a 10-minute online application and the willingness to look.
Warren Cohen is a finance writer based in Phoenix, Arizona, covering personal finance topics including credit, banking, and beginner investing. He earned his degree in business administration from Arizona State University and began his career working in consumer finance, where he gained direct experience with lending and credit systems. He now writes for personal finance websites and fintech platforms, focusing on clear, practical content that helps readers make informed financial decisions.
