Updated September 27, 2023
High-yield savings accounts help you earn a competitive annual percentage yield (APY) on your money, often many times higher than average accounts.
A high-yield savings account is similar to a standard savings account, yet it pays a significantly higher APY. High-yield savings accounts are more frequently offered from online-only banks. It’s not difficult to find one that requires a low minimum balance (or none whatsoever) and that doesn’t charge a monthly maintenance fee.
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The following accounts can be found at most banks and credit unions. They’re federally insured for up to $250,000 and offer a safe place to put your money while earning interest.
CDs are best for individuals looking for a guaranteed rate of return that’s typically higher than a savings account. In exchange for a higher rate, funds are tied up for a set period of time and early withdrawal penalties may apply.
Checking accounts are best for individuals who want to keep their money safe while still having easy, day-to-day access to their funds. ATM and other transactional fees may apply.
Savings and MMAs are good options for individuals looking to save for shorter-term goals. They’re a safe way to separate your savings from everyday cash, but may require larger minimum balances and have transfer limitations.
Note: Annual percentage yields (APYs) shown are as of Sept. 1, 2023. Bankrate's editorial team updates this information regularly, typically biweekly. APYs may have changed since they were last updated and may vary by region for some products. Bankrate includes only FDIC banks or NCUA credit unions in its listings.
For the fifth straight month, you can find a savings account with a yield that’s greater than the rate of inflation. Various high-yield savings accounts are earning as much as 5.25 percent, which outpaces the current 3.3 percent inflation rate. One factor that affects savings rates is the federal funds rate, which the Federal Reserve has raised to its highest level since 2001 — and yields on many competitive savings accounts have risen along with it.
Yields on savings accounts will remain at attractive levels for some time, but even if yields don’t rise further, savers will still win as inflation pressures ease. Earning 5 percent or more on your savings account looks better and better as the inflation rate declines closer to the 2 percent mark, delivering increased buying power to savers.— Greg McBride, CFA, Bankrate chief financial analyst.
While it’s easy to find a top-yielding account these days that beats inflation, there are plenty of other savings accounts that earn lackluster rates. For instance, the national average savings account interest rate on Aug. 28 was just 0.54 percent, according to Bankrate’s most recent survey of banks. That average factors in competitive rates commonly offered by online banks, as well as rock-bottom rates often found at large brick-and-mortar banks.
In June 2023, Bankrate updated its methodology that determines the national average savings account rates. More than 500 banks and credit unions are surveyed to generate weekly national averages. Among these institutions are those that are broadly available and offer high yields, as well as some of the nation’s largest banks.
A high-yield savings account can help your money earn a competitive annual percentage yield (APY). But you’ll want to shop around to find the account that’s right for you. Most of the accounts on Bankrate’s best lists are online savings accounts at FDIC banks. This is because online high-yield savings accounts generally offer the highest rates, and most of them require either a low minimum balance or none at all. FDIC-insured accounts at online banks are also a great place to keep an emergency fund.
Here are some steps to follow when deciding whether a high-yield savings account is best for you:
Only 1 in 5 Americans with short-term savings currently has an online savings account that earns a competitive yield of 3 percent or greater, Bankrate’s Online Savings Survey earlier this year found.
High-yield savings accounts typically pay a much higher APY than traditional savings accounts, providing savers the ability to earn more on their money while still enjoying the security of a federally insured account. Traditional savings accounts are commonly offered at brick-and-mortar banks and larger banks. These accounts may yield close to nothing, often around 0.01 percent APY. High-yield savings accounts can earn hundreds of times more these days.
Most high-yield savings accounts have a variable APY, which means the yield is subject to change. Consumers looking for a guaranteed yield should consider a certificate of deposit (CD), and a no-penalty CD might be a good option for those who prefer both a fixed APY and access to their money without incurring a penalty.
Savings accounts usually earn compound interest, which simply means you’ll earn interest on interest. As such, you’ll earn interest on your principal as well as the interest that accumulates over time.
Below are a few important things to consider when searching for a high-yield savings account. When choosing which account is right for you, also take a look at Bankrate’s expert reviews of popular banks, many of which offer high-interest savings accounts.
One of the most important considerations when choosing a high-yield savings account is the APY.
APY incorporates the effect of compounding. Simply stated, compound interest is the interest you earn on interest. You’ll earn interest on your initial deposit as well as on the interest that accumulates over time.
When it comes to APYs, higher is usually better, but it’s important to weigh the APY against any requirements to earn the yield, such as maintaining a minimum balance.
You can use Bankrate’s compound interest calculator to calculate your potential earnings on any savings account.
Minimum deposit amount requirements vary by bank, with some banks requiring $0 to open an account while others require $10,000 or more. Decide how much you’re willing and able to deposit when comparing high-yield savings products. If you’re trying to hit a particular goal, consider how much you’re willing to save and over what period of time.
Accounts requiring a higher minimum deposit might not offer the best yields, so it pays to check such deposit requirements at all institutions you’re considering before opening an account. Online banks, for example, often require no minimum opening deposit and no minimum balance, and many don’t charge any monthly maintenance fees either.
Not only do some high-yield savings accounts require a minimum opening deposit, but they may also require a set minimum balance in order to earn the APY offered or to avoid fees.
What’s important to consider when weighing the minimum balance requirements of various high-interest savings accounts is how often you’ll need to withdraw funds and whether you’ll be able to maintain the required balance to earn the APY.
The main fee to look out for when shopping around for a savings account is a monthly service fee. Some banks charge this fee if you go below a certain balance — or average daily balance — during a statement cycle.
Competitive banks and credit unions have a tendency to adjust their interest rates based on the Federal Reserve’s rate moves.
Unlike CD rates, which are locked for a set term, savings account yields tend to be variable, which means they could change at any time.
A bank may decide to lower or raise savings account APYs for various reasons. It may increase its rate as part of a promotion to attract more deposits, or it may adjust rates in response to broader economic factors, such as changes to monetary policy by the Federal Reserve.
High-yield savings accounts offer a safe place to earn interest on your money, as long as the funds are federally insured. The FDIC insures up to $250,000 per depositor, per FDIC-insured bank, per ownership category. Similarly, the National Credit Union Administration (NCUA) insures up to $250,000 per share owner, per insured credit union, for each account ownership category.
This federal insurance guarantees consumers that their money is safe in the event of a bank failure, as long as it’s within the limits and guidelines. You can confirm your bank is FDIC-insured by using the FDIC’s BankFind Suite. Meanwhile, if you bank at a credit union, make sure the institution is backed by NCUA insurance.
High-yield savings accounts with no minimum opening deposit requirement, no minimum balance requirement and no monthly service fees can be a good choice for nearly anyone. People can have different money-related goals and be at different stages in their financial life and benefit from these accounts. Here are a few examples:
A high-yield savings account is a great way to ensure your down payment money will grow until you need it to buy a house, condo or apartment. And unlike most CDs, you can add to your balance at any time.
A good strategy when saving for your next vacation is to determine how much you’ll need for the trip and then open a dedicated savings account for it.
There are some automated ways to keep your savings goals on track. These include setting up a split deposit from your direct deposit, so a portion goes into this travel savings account. Alternatively, you can set up automatic transfers into this account from a checking account or another savings account.
A high-yield savings account allows you to earn a competitive yield on your balance as you save for your wedding. You can keep adding to this account all the way up until you say “I do.” Having a separate account devoted to wedding savings can help you monitor your progress more easily, which helps you meet your savings goals for the big day.
Savings accounts are a good place to set aside funds for many financial goals. Here are the pros and cons of online high-yield savings accounts, so you can make sure one is right for you.
Online high-yield savings accounts typically pay a much higher APY than traditional savings accounts.
Many high-yield savings accounts offer digital tools that allow you to manage your savings easily through your computer, smartphone or tablet.
High-yield savings accounts at most banks and credit unions are insured by the federal government, meaning your money is safe.
Unlike with a certificate of deposit, funds in a high-yield savings account are easily accessible.
Rates for high-yield savings accounts are variable and could fall.
Some banks restrict withdrawals/transfers to only six a month.
Checks generally can’t be written using savings accounts.
Your money could get higher returns if you invest it.
Not all online banks offer branch or ATM access.
Whether it’s building an emergency fund or saving for a vacation or another big expense, a high-interest savings account can help you reach your goals. Plus, opening a high-yield savings account is relatively simple. Here’s how:
Be sure to deposit enough money to meet the account’s minimum deposit requirement. Otherwise you may be assessed a maintenance fee or earn a lower-than-expected interest rate until the minimum is met.
If you’re unsuccessful in opening a new account, you can ask the bank why this happened. Depending on the answer, you might want to go to ChexSystems’ website and request a report to see whether your banking history is the reason you were denied the account.
ChexSystems is a national specialty consumer reporting agency that keeps track of some of your banking history. Things that can appear on a ChexSystems report include your check-cashing history, any suspected fraudulent activity and a list of closed accounts.
High-yield savings accounts and traditional savings accounts share certain similarities, yet there are some key differences. High-yield accounts are frequently available online, while some traditional savings accounts — which include both passbook and statement savings accounts — might be restricted to opening and managing at a bank branch.
As the name suggests, high-yield savings accounts typically earn much higher rates than traditional savings accounts, and they may require a larger opening deposit and have minimum monthly balance requirements. Both accounts are subject to monthly fees, depending on the institution, but many banks offer high-yield and traditional savings accounts that charge no fees.
A high-yield savings account is a liquid account that’s meant for money you might need to withdraw at any time. Besides the flexibility of making withdrawals on demand (though they might be limited per statement cycle), you’re also able to add money to this account anytime.
Unlike savings accounts, CDs lock in your money for a set term, and if you withdraw your money before the term expires, you’ll usually incur an early-withdrawal penalty. What’s more, you typically can’t add money to a regular CD during its term.
Generally, a high-yield savings account doesn’t permit account holders to write checks against the account, while many money market accounts provide check-writing privileges.
Otherwise, money market and high-yield savings accounts are similar and typically available at FDIC-insured banks. Savings accounts are slightly more common than money market accounts, but many banks offer both.
A high-yield savings account is likely to pay a better yield than a checking account. Savings accounts might limit the number of withdrawals or transfers you can make per statement cycle.
Checking accounts are more for transactional purposes, such as paying bills or making debit card purchases. Checking accounts usually don’t have monthly transaction limits.
Bankrate’s editorial team regularly updates rates on this page about every two weeks. We mainly look for the highest APYs and break ties using the minimum balance to open a CD. Bankrate’s editorial team has reviewed nearly all of the banks and credit unions that they track. These institutions were selected because they offer competitive APYs, are larger (based on the amount of deposits or assets), frequently appear in internet searches or other possible factors. These banks and credit unions typically offer accounts that are available nationwide. All of these banks are insured by the Federal Deposit Insurance Corp. (FDIC) and all of the credit unions are National Credit Union Administration (NCUA) credit unions, insured by the National Credit Union Share Insurance Fund (NCUSIF).
Bankrate has more than four decades of experience in financial publishing, so you know you’re getting information you can trust. Bankrate was born in 1976 as “Bank Rate Monitor,” a print publisher for the banking industry and has been online since 1996. Hundreds of top publications rely on Bankrate. Outlets such as The Wall Street Journal, USA Today, The New York Times, CNBC and Bloomberg depend on Bankrate as the trusted source of financial rates and information.
These financial institutions are featured in our high yield savings account rate research: Alliant Credit Union, Ally Bank, Amerant Bank, America First Credit Union, American Express National Bank, Axos Bank, Bank 5 Connect, Bank of America, Barclays, Bask Bank, BECU (Boeing Employees Credit Union), Bethpage Federal Credit Union, BMO Harris Bank, BrioDirect, Bread Financial (formerly Comenity Direct), Capital One Bank, Chase Bank, CIBC USA, CIT Bank, Citibank, Citizens, Citizens Bank (Rhode Island), Credit One Bank, Comerica Bank, Customers Bank, Delta Community Credit Union, Discover Bank, Emigrant Direct, Fifth Third Bank, First Citizens Bank, First Internet Bank, First Technology Federal Credit Union, FNBO Direct, Golden 1 Credit Union, HSBC, Huntington National Bank, KeyBank, LendingClub Bank, Limelight Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Morgan Stanley Private Bank, MySavingsDirect, Navy Federal Credit Union, NBKC Bank, PenFed Credit Union, PNC Bank, Popular Direct, PurePoint Financial, Quontic Bank, Randolph-Brooks Federal Credit Union, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, State Employees' Credit Union, Suncoast Credit Union, Synchrony Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank (California), U.S. Bank, USAA Bank, Vio Bank, VyStar Credit Union, Wells Fargo and Zions Bank.