Savings account interest rates are at abysmal lows these days. Consider yourself lucky if you're getting 1% APY.
Why are rates so low? Just a few years ago you could do much better, but things have changed. Banks aren't doing as well as they used to. It can also be risky to offer rates that leave competitors in the dust.
Ron Lieber provides 7 reasons bank rates are pathetic. It's not all bad news -- when rates are low it costs less to borrow, and locking in a low interest rate for the long term (with a 30 year mortgage, for example) can be beneficial. If rates on savings accounts rise, loans will cost more.
Although rates are low, there are still a few ways to earn interest at the bank. Try online banks, small banks, and credit unions to earn a little more. You can also find good rates in reward checking accounts.