Chase savings accounts do earn interest, but the rate depends on which account you choose
Chase offers several savings products, and most of them pay interest. The amount you earn depends on the specific account type — Chase has different savings accounts with different interest rates, and those rates change over time based on what the Federal Reserve does with its benchmark rate.
The most common Chase savings account for everyday customers is the Chase Savings Bank account. This account earns interest, but the rate is typically lower than what you would find at online-only banks or at Chase's own high-yield savings account. As of now, rates vary, so you should check Chase's website or call your local branch to see the current rate on the account you are considering.
If you want to earn more interest on your savings, Chase also offers a Chase Premier Savings account, which generally pays a higher rate than the standard savings account. This account usually requires a higher opening deposit and a higher minimum balance to avoid a monthly fee.
Key Takeaways
- Chase savings accounts earn interest, but the rate is typically lower than online banks because Chase operates physical branches nationwide.
- Chase Premier Savings pays a higher interest rate than the standard Chase Savings Bank account, but requires a larger minimum balance.
- Interest rates on all Chase savings accounts change when the Federal Reserve adjusts its benchmark rate, so your earnings will fluctuate over time.
- Interest is usually compounded daily and deposited monthly, meaning you earn interest on your interest.
- You can check the current interest rate on any Chase savings account on Chase's website or by visiting a branch in person.
How interest compounds on your Chase savings
When Chase pays you interest, it does not just add a flat amount once a year. Instead, the bank calculates interest daily based on your balance, and then deposits that interest into your account each month. This is called daily compounding, and it means you earn interest on the interest you already earned.
For example, if you have $1,000 in your account and the interest rate is 0.01% per year, Chase calculates how much interest you earn each day, adds it to your balance, and then the next day's calculation includes that new, slightly larger balance. Over months and years, this compounding effect grows your money faster than if interest were straightforward added once at the end of the year.
The actual amount you earn depends on three things: how much money you keep in the account, how long you leave it there, and what the interest rate is at that time. A higher balance earns more interest. A longer time period means more months of compounding. And a higher interest rate means each day's calculation produces a larger amount.
Why Chase savings rates are lower than online banks
Chase's interest rates on savings accounts are typically lower than what online-only banks offer. This is not because Chase is trying to cheat you — it is because Chase has costs that online banks do not. Chase operates thousands of physical branches, employs tellers and managers, maintains buildings, and provides in-person customer service. Those costs are real, and they come out of the bank's profits.
Online banks like Ally or Marcus have no branches, no tellers, and no physical locations. They pass those savings on to customers by offering higher interest rates. If earning the highest possible interest rate is your main goal, an online savings account might be a better choice than Chase. But if you value being able to walk into a branch, deposit cash, or speak to someone in person, Chase's lower rate is the trade-off you are making.
You can compare current rates across different banks on financial websites, though the rates change frequently. What matters is the rate at the moment you open the account, not what it was last month.
The difference between savings accounts and money market accounts at Chase
Chase also offers a money market account, which is a hybrid between a savings account and a checking account. Money market accounts at Chase typically pay interest rates similar to or slightly higher than savings accounts, but they come with a debit card and check-writing privileges — features that savings accounts do not have.
The trade-off is that money market accounts usually require a higher minimum balance to avoid a monthly fee, and they may limit how many times you can withdraw money per month. If you need frequent access to your cash, a regular savings account is simpler. If you want some of the features of a checking account but also want to earn interest, a money market account might work for you.
Both savings accounts and money market accounts are FDIC insured up to $250,000, which means if Chase fails, the government guarantees your money is safe up to that limit. This is different from investing in stocks or bonds, where your money is not may provide.
How to find the current interest rate on a Chase savings account
Chase publishes its current interest rates on its website under the savings account product pages. You can also call your local Chase branch or visit in person to ask about the current rate. The rate you see online should match what a branch tells you, because Chase sets rates nationally.
When you open an account, the rate you receive is locked in at that moment. If rates go up after you open the account, your rate will eventually go up too — but Chase does not have to raise your rate when ready. If rates go down, your rate will go down as well. This is normal for all banks.
Some people open a Chase savings account because they already have a Chase checking account and like having everything in one place. Others choose Chase because they have a local branch they can visit. Neither of those reasons is wrong, but they are separate from the question of whether you are earning a competitive interest rate. It is worth checking what other banks offer before you decide.
What happens to your interest if you close the account
If you close your Chase savings account, you receive all the interest that has been deposited into the account up to that point. Chase does not take back interest you have already earned. However, once the account is closed, it stops earning interest when ready.
If you are thinking about closing the account because the interest rate is too low, that is a reasonable decision. You can move your money to another bank that offers a higher rate. Just make sure you have enough time to open the new account and transfer your funds before you close the Chase account, so you do not have a gap where your money is not in any account.
Frequently Asked Questions
How much interest will I earn on $5,000 in a Chase savings account?
That depends on the current interest rate, which changes over time. If the rate is 0.01% per year, you would earn about 50 cents per year. If the rate is 0.05% per year, you would earn about $2.50 per year. Check Chase's website for the current rate, then use an online interest calculator to see what you would earn.
Is the interest on a Chase savings account taxable?
Yes. Any interest you earn on a savings account is considered income by the IRS. Chase will send you a 1099-INT form at the end of the year if you earned $10 or more in interest, and you will need to report that income on your tax return.
Can I move my money to a higher-paying savings account without losing interest?
Yes. You can transfer your money to another bank at any time, and you keep all the interest you have already earned. The interest is yours — it does not disappear when you move the money. Just make sure the new account is open and ready to receive the transfer before you close the Chase account.
Does Chase charge a fee to have a savings account?
The standard Chase Savings Bank account has no monthly maintenance fee as long as you maintain a minimum balance, which varies. Chase Premier Savings requires a higher minimum balance but may offer other benefits. Check the current terms on Chase's website, as fee structures can change.
What if interest rates go down — will my Chase savings rate go down too?
Yes, eventually. When the Federal Reserve lowers its benchmark rate, banks typically lower the interest rates they pay on savings accounts within days or weeks. Your rate will decrease along with the market, which is why rates on savings accounts fluctuate over time.