Why You Can Trust the MarketWatch Guides Team
Here’s a breakdown of how we reviewed and rated top banks and credit unions
130
Institutions MonitoredOur team reviewed more than 100 of the country’s largest and most prominent financial institutions, from big banks like Chase and Bank of America to credit unions like Navy Federal Credit Union and PenFed Credit Union.
688
Products StudiedTotal number of checking, saving, CDs, and money-market accounts that inform our review ratings.
719
Rates TrackedThe accounts with an annual percentage yield (APY) several times the national average rate receive the highest scores. Accounts with the lowest APY offering (under 1%) earn the least points.
10
Professionals ConsultedBefore we began our research process, we consulted with financial advisors and industry experts to ensure our evaluations covered the banking product aspects that matter most to potential customers.
Featured Providers
We may earn a commission from partners featured in the table below. However, the article on this page was written independently and not influenced by our affiliate partnerships.For more information, visit our editorial guidelines.
Key Takeaways
- To get you the most up-to-date information, our research team conducted first hand research by opening up our own accounts at each bank on this list.
- To determine the top high-yield savings accounts, Banks were evaluated based on account options, fees, rates, terms and customer experience
- With a 5.25% rate, UFB Direct offers the highest APY high yield savings account.
Best High-Yield Savings Accounts
We researched over 100 financial institutions to evaluate their account options, fees, rates, terms and customer experience to determine the top high-yield savings accounts. Our list includes these nine financial institutions, which all have APYs over 4%, minimal or no monthly fees and low or no deposit requirements. Our research team also conducted first-hand research by opening our own accounts at each bank. Read more on our findings about each bank below.
SoFi High-Yield Savings Account
Best Checking and Savings Account Combo
4.8
Minimum DepositNoneSavings APY1.20% to 4.60%BonusUp to $300 bonus
Why We Like It
Aside from its competitive APY, we like SoFi’s high-yield savings account for a few reasons. For one thing, it transfers money faster than any bank we tested. For money transferred in, we were able to see money available instantly in many cases, but one business day at the longest. Most banks take two to five business days. SoFi’s account is also fee-free, doesn’t limit the number of withdrawals you can make and has some great free budgeting tools.
Our Experience Opening a SoFi HYSA
Overall, our experience with opening a high-yield savings account with SoFi was positive. We liked the following features:
- Robust budgeting tools free with account: We were able to connect multiple accounts, see spending trends and even get estimates of our car’s value and our net worth.
- Fast availability of funds: We were able to transfer money in and out of the account and have it available by the end of a business day.
- Online cancellation: This was one of the few banks that offered the option to close an account online.
- Easy opening process: While it did take us 12 clicks to open the account, which is about average, the whole process only took six minutes, which is fairly fast.
- Speedy customer service: It did take three clicks to get to chat, but we were on hold for less than a minute.
Source: Sofi.com via MarketWatch Guides user testing.
We also found a few areas that needed improvement:
- No Zelle availability: Many banks use Zelle for bank-to-bank transfers, so it might be inconvenient for you that SoFi doesn’t.
- Unclear rate disclosure: We felt the advertising doesn’t make it clear that you have to use direct deposit to get the full savings APY.
- Unclear menu navigation: Several key actions and features, such as mobile check deposit and the ATM locator, are located under the “More” tab on the bank’s website, which our researchers found difficult to find.
Savings Tools and Cash Deposits
Savings Tools
The bank’s optional Roundups feature rounds your debit card purchases up to the nearest dollar and automatically transfers the change from your interest-bearing SoFi checking account to your savings.
There are also SoFi Vaults, which allows savers to divide a single savings account into as many as 20 segments. These segments can then be used to make savings goals such as setting up an emergency fund or saving for a down payment for a home.
How To Deposit Cash
Depositing cash in a SoFi savings account comes with one hurdle: You first have to go to a Green Dot location, such as CVS or Walmart, to deposit cash on your SoFi debit card. This service can cost up to $4.95. After that, you can transfer money from your checking account to your savings.
SoFi Bank Promotions
Through June 30, 2024, you can get a cash bonus for opening an account and setting up direct deposits on a SoFi checking and savings account. The offer also applies to new and existing customers who haven’t set up direct deposits.
- Get a $50 bonus for receiving direct deposits between $1,000 and $4,999.99.
- Get a $300 bonus for receiving direct deposits of $5,000 or more.
Pros & Cons
Pros Fastest transfers among the banks we used, with funds ready by the end of the business day No account fees or minimum balance requirements Lowest rate is still more than twice the national average Offers tools such as rounding up debit card purchases and dividing savings into multiple goals Savings account comes with a high-yield checking account Cons Direct deposit or $5,000 in monthly deposits required to earn the highest APY Doesn’t allow account holders to deposit cash directly into savings Fee of to $4.95 to deposit cash in the included checking account No Zelle availability
Bask Bank Interest Savings Account
Best for Quick Account Set-up Process
4.7
Minimum DepositNoneSavings APY5.10%BonusN/A
Why We Like It
If you want a high rate and don’t need immediate access to the money you deposit, the Bask Bank Interest Savings Account could work for you. Account holders can only make deposits via mobile check deposit, automated clearing house (ACH) transfer or wire transfer.It also doesn’t have a minimum deposit requirement to open an account.
Our Experience Opening a Bask Bank HYSA
Bask Bank’s account opening process was one of our favorites. Here’s why we liked it:
- Simple application process: Opening an account with Bask Bank took us eight steps. Only one other company we tested (Upgrade) required fewer steps.
We also encountered a few issues with Bask Bank:
- Slow transfers: Transfers can take up to five business days to complete. This is among the longest transfer times of the banks we evaluated, according to our research.
- Chat isn’t instant: Unlike with some of its competitors, you’ll have to send a message and wait for a response from chat – up to 24 hours.
- ID required for login: You’ll need a government-issued ID to log in and complete your application. Not all banks require this, so while it adds a layer of security, we believe it’s unnecessary.
- No Zelle availability: While it’s not the only bank to not offer Zelle, it’s a convenience that many customers look for due to speed and safety of transactions.
Source: Baskbank.com via MarketWatch Guides user testing
Pros & Cons
Pros Easy account-opening process APY is more than 10 times the national average No minimum balance or minimum opening deposit requirements No monthly account fees Offers mobile check deposit Cons No physical branches No ATM or debit cards and no option to deposit cash Monthly limit of six withdrawals via ACH transfers Can take up to five business days to transfer funds ID required for sign-up
Discover High-Yield Savings Account
Best Customer Service
4.6
Minimum DepositNoneSavings APY4.25%BonusUp to $200
Why We Like It
We always like a bank with no monthly fees and no minimum opening deposit or monthly balance requirement, and those are some of the things Discover Bank offers. Its customer service is also hassle-free, extremely helpful and available 24/7 – plus it’s fully based in the U.S.
Our Experience Opening a Discover HYSA
When our team opened a high-yield savings account with Discover, we were impressed by its customer service and quick processes. Here’s why:
- Quick phone tree: When we called customer service, it required just one screen, and we were connected with a live agent in less than a minute.
- 24/7 customer service: Discover offers around-the-clock support via phone.
However, we did find some areas where the bank could improve:
- Hold on funds: Discover has a 48-hour hold on deposited funds before they become available for use.
- Delayed Zelle availability: Zelle isn’t accessible until 90 days after the account has been funded.
- Multistep wire transfer process: Discover requires eight steps to send a wire transfer, which is more involved than most of the banks we opened accounts with.
Pros & Cons
Pros No monthly account fees No minimum deposit or minimum balance requirements Zelle access for person-to-person payments Fast customer service and 24/7 availability Cons Lower APY than some other high-yield savings accounts Doesn’t accept cash deposits No ATM access for savings account holders No physical branches Zelle only available 90 days after account funding
UFB Direct High-Yield Savings
Best for ATM Access
Minimum DepositNoneSavings APY5.25%BonusN/A
Why We Like It
As another bank with no minimum opening balance requirements and no monthly fees, UFB Direct is also one of our top picks. And because, unlike a lot of other online banks, it still offers versatile phone support, it’s a great option for those who prefer to deal with “real people.” Additionally, you can access your money easily at one of the roughly 91,000 ATM locations across the country.
Our Experience Opening UFB Direct HYSA
We uncovered some impressive features when opening our account with UFB Direct:
- Strong security features: After just 10 minutes of inactivity, we had to complete a CAPTCHA (“I am not a robot” test) and two-factor authentication to log into our account.
- Custom alerts: We had the option to set up phone alerts for things such as statement availability or a low balance. This is not only convenient but also allows us to take quick action if there’s suspicious activity.
- Versatile phone service: While some banks have moved almost exclusively to online support, UFB Direct offers a variety of services over the phone, including wire transfers.
We also observed a few noteworthy limitations:
- Delayed information change process: Personal information can’t be edited for the first 30 days after the account is opened, which can be inconvenient if you need to update details such as a change of address.
- Several steps to link external accounts: Linking outside bank accounts to our UFB Direct account requires multiple steps, unlike our experience with some competitors we tested out.
- Sparse main dashboard: The main dashboard lacks some of the features we’d expect to see, such as our APY and statement details.
Pros & Cons
Pros One of the highest rates available for savings accounts Free access to 91,000 ATMs No account fees No minimum balance or minimum deposit requirements Cons Only one branch, located in San Diego Sparse user dashboard when logged in
Milli High-Yield Savings Account
Best for Tracking Spending
4.6
Minimum DepositNoneSavings APY4.75%BonusN/A
Why We Like it
We like Milli best for its “Jars” feature that allows savings account holders to earmark their money for up to five financial goals. Along with this feature comes the detailed spending insights that categorize your spending, helping you to visualize your habits and build a better budget.
Our Experience Opening a Milli HYSA
We found that Milli was one of the most complicated accounts to set up. And because it’s app-only and doesn’t allow you to manage your account through the website, the user experience isn’t the best.
But Milli has its benefits. Here are a few positive takeaways:
- Innovative budgeting tools free with account: Milli allows you to split funds into customizable “jars.” It also has detailed spending insights that list your purchases based on the merchant and category and whether it was under $10.
- Visibility on interest earned: Milli shows you the daily interest that has accrued even before the funds hit your account, giving you insight into your savings’ growth.
- Comprehensive FAQ: Milli’s app provides an extensive FAQ document, which could answer many of the questions you might have.
Source: MarketWatch Guides user testing.
Here’s what we didn’t particularly like about opening a savings account with Milli:
- App only: Milli’s high-yield savings account is entirely app-based, meaning you must apply for an account and manage it entirely on a mobile device.
- Limited customer service: Milli only offers support via chat and email. There’s no customer service phone number listed.
- No check deposits: Unlike the other providers we listed here, Milli doesn’t have an option to deposit checks. Your only options are direct deposit and bank transfers.
- Slow transfers: Milli states that it can take up to five business days for a transfer to hit your account, which was our experience with our opening deposit.
Pros & Cons
Pros No account fees No minimum opening deposit or minimum balance requirements No monthly withdrawal limits Innovative budgeting tools Cons No ATM access or option to deposit cash No customer service by phone Can take up to five business days for transfers App-only service
Zynlo Bank Tomorrow Savings
Best for Roundup Savings Tools
4.5
Minimum Deposit$10Savings APY5.00%BonusN/A
Why We Like It
We like this account for its easy opening process and cool savings features. Requiring the least amount of information, this account was one of the most streamlined to open. Also, you can create your savings goals right on your home screen and participate in automatic rounding from your checking account to deposit your spare change into savings.
Our Experience Opening a Zynlo Bank HYSA
We liked Zynlo Bank’s account opening process and its savings goals feature.
- Savings goals feature: Zynlo Bank allows you to create savings goals directly on your account’s home screen. This feature, called folders, tracks your progress and provides updates for motivation.
- Streamlined account opening process: Among the banks we tested, Zynlo was one that required the least amount of information to open an account.
- Low minimum deposit requirement: We only needed to deposit $10 to get started.
Source: Zynlobank.com via MarketWatch Guides user testing.
Zynlo fell short for us in website performance and customer service availability. Here’s our take:
- Lackluster website performance: We found the website to be slow, and it was difficult to navigate linking a new external account.
- No chat support: Zynlo doesn’t offer chat for customer service. FAQs are all that’s available online, but there’s phone support 24/7.
- No wire transfers: You’ll only be able to make deposits via mobile check deposit and electronic transfers.
Savings Tool
With Zynlo’s Roundup Savings, customers with both high-yield checking and savings accounts from Zynlo can also have their debit card purchases rounded up to the next dollar, with the change going to their savings. Zynlo fully matches the rounded amount in the first 100 days after you open an account.
You can also continue to receive the full match if you keep a $5,000 minimum average daily balance in your checking account. You’ll receive a 25% match if your balance is lower.
Zynlo is an FDIC-insured online-only bank that provides services through PeoplesBank.
Pros & Cons
Pros Competitive APY Low minimum opening deposit Matches some savings when paired with a checking account No account fees or minimum balance Cons No physical branches Doesn’t accept cash deposits No wire transfers
Synchrony High-Yield Savings Account
Best for Linking Outside Bank Accounts
4.5
Minimum DepositNoneSavings APY4.75%BonusN/A
Why We Like It
Synchrony also has a smooth account opening process, and efficiency is high on our list of likes. Not to mention, setting up recurring deposits and linking other bank accounts is virtually effortless. And, like some of the other banks on our list, this one has no minimum deposit, minimum balance or monthly fees. But the best part is that you can make the debit card free to use out of network since the bank reimburses up to $5 of ATM fees per statement cycle.
Our Experience Opening a Synchrony HYSA
Synchrony Bank stood out to us for its speedy account opening process and its rate transparency. Here’s what we observed:
- Efficient account opening process: It only took us about five minutes to open a Synchrony account. This was one of the quickest processes among the banks we tested.
- Transparency: Synchrony Bank provides clear and upfront details about its savings account’s APY and the tiers for its rewards program.
- Seamless account integration: We found it easy to set up recurring deposits and link to an outside bank account.
- Accessibility: Synchrony’s application allows you to decline providing a phone number if you have a hearing or speech disability.
Source: Synchrony.com via MarketWatch Guides user testing.
However, the following things may present problems for some users:
- Difficulty with customer service: It was challenging to find the bank’s phone number on the website. Then, it was cumbersome to get through seven voice prompts to reach a customer service representative.
- Limited wire transfer options: You can only complete wire transfers by phone, making it fairly inconvenient for those who like to complete their transactions online.
Pros & Cons
Pros Competitive APY compared to other high-yield savings accounts Optional ATM card Reimburses up to $5 in third-party ATM fees per statement cycle No minimum deposit, minimum balance or monthly fees Cons Limit of six withdrawals per month via checks, automatic or telephone transfers or purchases on your ATM card No physical branches Doesn’t offer checking accounts
EverBank (Formerly TIAA Bank) High-Yield Savings Account
Best for Fast Deposits
4.5
Minimum DepositNoneSavings APY5.15%BonusN/A
Why We Like It
A few of the banks on our list have budgeting tools, and we found EverBank’s to be arguably the best. These tools allow you to link your bill payment accounts, categorize your spending, and even run reports to see where your money’s going.
Our Experience Opening an EverBank HYSA
We liked EverBank for its swift deposit speeds and handy budgeting tools, but our researchers found the application process frustrating and had multiple errors.
Here are our positive findings:
- Fast processing of deposits: EverBank impressed us by making deposits available within just one day.
- Robust budgeting tools: You can link your bill payment accounts to your EverBank savings account to set up budget categories and run spending reports.
- Online account closure: Unlike some competitors, Synchrony lets you close your account online instead of by calling.
Source: Everbank.com via MarketWatch Guides user testing.
Here’s the problem we faced:
- Clunky website: We had issues getting through the account application process without errors. It took us three attempts to get past the form section. Also, we were often redirected to TIAA’s website. (TIAA’s banking segment became EverBank when it was sold in 2023.)
Pros & Cons
Pros APY is more than 10 times the national average No account maintenance fees or minimum balance requirements No minimum opening deposit Mobile check deposit available Cons Limited physical presence Cash deposits only available at the bank’s nine Florida branches
Upgrade High-Yield Savings
Best for Easy Application Process
4.5
Minimum DepositNoneSavings APY5.21%BonusN/A
Why We Like It
We like Upgrade for its quick application process – just five minutes and only seven steps. They also offer several other products, including personal loans, that not all online banks have.
Our Experience Opening an Upgrade HYSA
The fintech company Upgrade offered a quick and streamlined application process compared with other banks we’ve reviewed.
- Fast application process: We had an easy experience completing Upgrade’s application. It required minimal steps and personal information compared to the other financial institutions we opened accounts with.
However, if you’ve recently moved, you may have to wait to open an Upgrade savings account.
- Rejected due to recent address change: We’re unable to detail the complete experience with Upgrade because our team member was denied an account due to their recent address change.
Pros & Cons
Pros Competitive APY as long as there’s at least a $1,000 daily closing balance No monthly fees No minimum opening deposit Offers other financial products, including checking accounts Cons $1,000 minimum balance required to earn interest No cash deposits or ATM access Joint accounts not available
*APYs (Annual Percentage Yields) accurate as of May 20, 2024
What Makes the Best High-Yield Savings Accounts?
A high-yield savings account is a savings account with a significantly higher interest rate than your average account. This means your money grows faster so you can get a boost for your financial goals.
But what makes the best high-yield account? Consider these other features:
- Competitive APY: The rate your money earns annually is a big part of what makes a high-yield savings account so appealing. The higher the APY, the faster your money grows.
- Accessibility: Another reason you might choose a high-yield savings account is because your money is more accessible here than in something like a CD or money market account. Make sure the bank you choose offers convenient ways to access your cash, such as in-network ATMs or quick fund transfers.
- Low fees: Nothing kills your earnings faster than fees. The best accounts don’t have a monthly maintenance fee or other hidden charges.
- Dependable customer service: Make sure you’re able to access an agent during convenient times. Look for chat, email and phone support and excellent customer reviews.
- Low or no minimum balance: Many of the accounts on our list don’t require you to keep a minimum balance in order to get the best rates, but check that carefully before you commit.
- Transparency: If you have to sleuth out a bank’s terms and conditions to understand what you’re getting, you might want to look somewhere else or ask a lot of questions so you know exactly what you’re getting into.
- Stellar reputation: Look for a bank with a reputable brand name. It’s best to entrust your savings to a company that has stood the test of time and earned the trust of its customers.
- Long track record: Before committing to a high-yield savings account, ask about its rate history to see if it has consistently earned an above-average APY. While this is not a guarantee that rates will stay high, a long track record of high rates is a good indication that the account’s APY is likely to remain attractive into the future. It’s difficult to switch bank accounts, so you’ll want to make sure you’re not falling for a teaser rate – and that your account is likely to keep its attractive rate of return.
Ask an Expert
Brandon Renfro
Ph.D., CFP, RICP, EA
“High-yield savings accounts offer a good combination of yield and accessibility that allows you to earn a decent rate on your short-term savings. However, understand that the rate[s] on high-yield savings accounts can adjust quickly, so they may not be appropriate for longer-term savings.”
What Is a High-Yield Savings Account?
High-yield savings accounts are deposit accounts with much higher interest rates than standard savings accounts. They’re most commonly found with online banks and credit unions because having lower overhead costs allows these financial institutions to offer better rates on deposits.
Like traditional savings accounts, high-yield savings accounts may limit the number of withdrawals you can make each month. Each bank or credit union sets its own max. Many cap withdrawals at six per month, which was the Federal Reserve’s limit on some types of transfers until 2020.
“Some banks offer high savings APYs but with certain condition. These might include needing to keep a high minimum balance, or paying monthly fees that can lower the interest you make.”
– Eric Croak, CFP and president ofCroak Capital
Some savings accounts have different interest-earning balance levels, meaning only a portion of your deposited funds might get the highest APY. “You really need to understand the requirements to receive the rate that’s advertised,” Croak said.
What We Looked for in High-Yield Savings Accounts
We tracked more than 40 factors in each account we opened so that we could give you the best data possible. Here are just a few:
| Factor | Description |
|---|---|
| APY (%) | Annual Percentage Yield – the interest rate on the savings account. |
| Minimum Opening Deposit | Minimum amount required to open the savings account. |
| Time to Apply | Approximate time it took us to complete the application process. |
| # of Clicks to Open | Number of clicks or steps needed to open the account online. |
| Speed of Deposits | How quickly deposits made into the account are processed and available for use. |
| Steps to Transfer Funds | Number of steps required to transfer funds into or out of the account. |
| Budgeting Tools | Availability of tools or features within the account to help with budgeting or financial planning. |
| Customer Service | Speed and responsiveness of the bank’s customer service and what avenues it uses (chat or phone). |
| Budgeting Tools | Does this bank have budgeting tools and how robust are they? |
| Zelle Availability | Does the bank use Zelle for bank-to-bank transfers? |
>> Related: What is a high-yield savings account?
High-Yield Savings Account Rates
These accounts can offer a way for customers to earn more on their savings while still maintaining access to their funds. Another key feature of most high-yield savings accounts is their variable APY, which means the interest rate can fluctuate with the market.
However, the APYs of the best high-yield savings accounts remain significantly higher than the national average savings rate – as much as 10 times higher or more, according to MarketWatch Guides research.
Below are APYs from six top banks offering a high-yield savings account:
“Be wary of teaser introductory rates from less-established institutions; oftentimes their interest rates will plummet after a set number of months after the initial deposit.”
- Thomas Schulte CFP, partner and director of financial planning at Napier Financial.
>> Related: Learn more about the average saving account interest rate
How to Use a High-Yield Savings Account
Using a high-yield savings account strategically can help you effectively manage your savings and maximize its growth potential. Arguably the best use is to set up a high-yield savings account to hold your emergency fund. This is money you only want to use for emergencies – but when these emergencies arise, you’ll need the money quickly.
High-yield savings accounts can also be a useful part of a broader investment strategy, experts we spoke with said. These accounts offer a way to keep a portion of your money easily accessible while still earning a return.
“We suggest creating an emergency fund with at least three months – three-to-six, if possible – of essential living expenses."
- Rob Williams, managing director of wealth management at Charles Schwab.
They can be used alongside other investments, such as a retirement account like an IRA or 401(k), a college savings fund (529 account) and stocks and bonds.
Even with a high-yield savings account, keep investing a portion of your income in a diverse portfolio, said Anand Talwar, head of deposits and president of Ally Invest Group said.
“Consider housing additional savings in certificates of deposit or investing in stocks, bonds, ETFs or mutual funds, where your money has the potential to grow your wealth even more,” Williams said.
Online Banking vs. Traditional Banking: High-Yield Savings Accounts
Most of the high-yield savings accounts offering the best rates are from banks and credit unions that operate exclusively online. Online banks are generally able to offer higher APYs than brick-and-mortar banks because they don’t have the overhead costs associated with branches and their staff.
While traditional brick-and-mortar banks don’t tend to offer high savings account rates, there are exceptions. For example, the Citi Accelerate Savings account has an APY over 4%* and no minimum opening deposit. It has a $4.50 monthly service fee, but there are options for getting the fee waived.
Another traditional bank with a high-yield savings account is PNC Bank, which also offers an APY above 4%*. PNC doesn’t require a minimum opening deposit, and it doesn’t charge monthly maintenance fees.
“Oftentimes, long-time, loyal customers at traditional financial institutions pay more for loans and earn less on savings than new customers,” Alia Dudum, millennial money expert at LendingClub, told MarketWatch Guides. “If you have money sitting idly, consider switching to a digital bank.”
Online Banks vs. Brick-and-Mortar Banks
| Factor | Online Banks | Brick-and-Mortar Banks |
|---|---|---|
| Accessibility | Typically offer 24/7 online and mobile banking | Branch access for in-person transactions |
| Account Fees | Often no monthly maintenance fees | May have monthly service fees, but can often be waived |
| APY | Generally offer higher APYs | Rates may be lower, but exceptions exist |
| Bank Bonuses | Commonly offer sign-up bonuses and promotions | Less common, but some banks do offer bonuses |
| Customer Service | Relies heavily on online and phone support | In-person assistance available at branches |
| Deposit Insurance | FDIC-insured up to $250,000 per depositor, per bank | FDIC-insured up to $250,000 per depositor, per bank |
| Minimum Requirements | Often no minimum balance requirements | Minimum deposit may be required |
| Withdrawal Limits | May have limitations on the number of withdrawals | Similar withdrawal limits to traditional savings |
>> Related: Learn more about the best online banks
Is a High-Yield Savings Account Worth It?
HYSAs are powerful financial tools to help you grow your money without losing access to it, so there are a few scenarios where they are worth it:
- Emergency fund: A high-yield savings account can be ideal for establishing an emergency fund that earns interest. If your car breaks down or you have a medical emergency, you’ll need immediate access to your money. On the other hand, if you’re fortunate enough not to need it for a while, it will be accruing interest until you do.
- Short-term goals: Whether you’re saving for a dream vacation, a wedding or a new car, a high-yield savings account can help you reach your short-term goals sooner than with a traditional savings account.
- College funding: Saving for your children’s education is an important goal for many families, but if you’ve had to start investing later in their lives, you may not have time to wait for a CD or money market account to mature.
Who Should Get a High-Yield Savings Account?
High-yield savings accounts can be beneficial for a broad range of customers, but they may be particularly well suited for savers with certain objectives:
- Maximize returns: With APYs often several times higher than those offered by traditional savings accounts, high-yield savings accounts can help balances grow faster.
- Build an emergency fund: High-yield savings accounts can be a good way ofbuilding emergency funds since you get both competitive rates and easy access to your money.
- Meet short-term goals: If you’re saving for a goal such as a vacation or wedding, a high-yield savings account can give you a higher APY than traditional savings accounts and let you withdraw money when you want, unlike typical CDs.
“If you’re just starting to save for short-term goals or to establish an emergency fund, a savings account might be a good bet. It also makes sense if you’re planning to make a big purchase — such as a refrigerator, vacation or down payment on a car — within a year or so."
- Mary Hines Droesch, head of Consumer and Small Business Products at Bank of America
How Much Does a High-Yield Savings Account Earn?
While many financial institutions offer 4% to 5% APYs (or higher) on high-yield savings accounts, our recent consumer banking survey shows 62% of Americans earn less than 3% in interest on their savings or money market accounts.
Keeping your savings in a high-yield savings account can make a big difference in the long run. The chart below shows how much you can earn in interest over five years holding $10,000 in a traditional savings account compared to a high-yield savings account.
Because they give you a higher return, high-yield savings accounts are better than regular savings accounts for lowering the impact of inflation on your deposits. As the Fed has raised the federal funds rate in an attempt to reduce inflation, APYs on high-yield savings accounts have generally gone up.
A low-interest savings account typically offers APYs that may not keep pace with the rate of inflation, so the purchasing power of your money typically decreases over time. On top of providing better rates, high-yield savings accounts often don’t have monthly maintenance fees or minimum balance requirements.
High-Yield Savings Account Calculator
Use our savings account calculator to see exactly how much you can earn with a high-yield savings account.
Enter your projected deposit, monthly contributions, term and rate to see how much your savings can grow.
SAVINGS INFORMATION
YOUR TOTAL SAVINGS$17,622.94
Initial Deposit$10,000
Total Contributions$6,000
Interest Earned$1,623
Alternatives to High-Yield Savings Accounts
Because high-yield savings accounts can have limitations, such as limited physical access and variable APYs, some customers prefer alternative ways to save.
“Investors have several options when it comes to short-term savings. Do you need and want quick access to your money? If so, consider interest-bearing checking or savings accounts. If you can wait roughly a day, consider money market funds for competitive rates now. If your money is earmarked for longer-term savings or investment goals, consider CDs.”
- Rob Williams, managing director of wealth management at Charles Schwab
Comparison of Deposit Accounts
There are many ways to invest your savings and while a high-yield savings account may work for you,here are some other options to consider:
| Factor | High-Yield Savings Accounts | Money Market Accounts | CDs | Savings Bonds | Checking Accounts |
|---|---|---|---|---|---|
| Accessibility | May offer ATM access or only electronic transfers | May offer check-writing capabilities and ATM access | Generally don’t allow access to funds until the term ends | No access for the first year | Unlimited transactions, providing easy access to funds |
| APY | Variable rates that are usually higher than checking rates | Competitive, variable rates similar to high-yield savings accounts | Can offer competitive (often fixed) rates that tend to be higher than savings and money market rates | Typically competitive rates, but fluctuate every 6 months based on inflation | Typically don't earn interest |
| Minimum requirements | May require minimum balances or opening deposits | Often require substantial balances or initial deposits | May require high initial deposits | Bonds are purchased for $25 - $10,000 | May require minimum balances or opening deposits |
| Risk | Generally low risk, but returns may vary | Generally low risk, but returns may vary | Low risk, with returns that are usually guaranteed upon maturity | Some risk: credit risk - the issuer could default; interest rate risk, market risk | Minimal risk, but they don’t tend to earn interest |
| Withdrawal restrictions | May have monthly withdrawal limits | May have monthly withdrawal limits | Typically charge a penalty for withdrawing funds before the term ends | Can be withdrawn after 1 year | Generally allow unlimited transactions |
>> Related: Read about savings accounts vs. money market accounts
Our Recap of the Best High-Yield Savings Account
- SoFi Bank Review: Best Checking and Savings Account Combo
- Bask Bank Review: Best for Quick Account Set-Up Process
- Discover Savings Account Rates: Best Customer Service
- UFB Direct Savings Account Rates: Best for ATM Access
- Milli Savings Account Rates: Best for Tracking Spending
- Zynlo Bank Review: Best for Roundup Savings Tools
- Synchrony Bank Review: Best for Linking Outside Bank Accounts
- EverBank Review: Best for Fast Deposits
- Upgrade Savings Account Rates: Best for Easy Application Process
FAQ: High-Yield Savings Accounts
The amount of interest you can earn on $10,000 in a high-yield savings account will depend on the account’s APY and how often interest is compounded. For example, if the APY is 5.25% for the entire year and interest is compounded daily, you’ll earn about $525 in a year.
APYs on savings accounts are variable and can change without notice. The amount and frequency of change varies depending on the bank’s policies, competition and external economic factors such as the Fed’s changes to its benchmark rates.
Your bank sets the limit on the number of withdrawals you can make from your high-yield savings account each month. That number could be six times per month, since that used to be the federal limit. If you exceed your savings account’s withdrawal limit, you’ll likely be charged fees.
Yes, interest earned from a high-yield savings account is typically considered taxable income and must be reported when you file your taxes. If you earn at least $10 in interest in a calendar year, your bank will likely issue you Form 1099-INT, which details the amount of interest you received.
You’re unlikely to find an FDIC-insured savings product that will provide a 7% interest rate. However, many online CDs and high-yield savings accounts offer APYs in the range of 4% to 5% or more.
The best high-yield savings accounts right now offer above 5% APY. These are generally from online banks and credit unions.
The earnings for a high-yield savings account depend on the account’s APY and the time frame you’re considering. At 4.35% APY, $50,000 would earn about $2,176 in one year, assuming the rate doesn’t change and interest is compounded daily.
Expert Tips and Insights
Heather Bono, Ph.D.
Chair of Accounting and Finance, University of West Georgia
See answers
What impact do factors like inflation and monetary policy have on the returns of high-yield savings accounts?
Outside factors, like inflation and market conditions, cause fluctuations in the interest rates of high-yield savings accounts, just like those for traditional savings accounts. For example, during good economic times when consumers are increasing their spending and banks need to attract deposits, rates are likely to increase so that the banks have access to funds to loan. Currently, average rates of high-yield savings accounts are 4% to 5%, which are much higher than those for traditional accounts, around 0.47%.
At what stage in a person’s life would you recommend they get a high-yield savings account?
The earlier an individual starts saving, the better. The younger an individual is, the longer they have for their savings to grow. Parents can obtain accounts for their minor children to help them start saving. The FDIC or NCUA insures deposits like conventional savings accounts, which protects your deposits up to $250,000 per account. The FDIC and NCUA provide a list of banks or credit unions with this insurance on their websites.
Are there any other savings vehicles or accounts that individuals should consider?
Various savings vehicles are available, but they are not one-size-fits-all. Individuals should consider their time to save, their risk tolerance, and other factors related to their finances, such as their current debt levels, in addition to their savings goals (vacation, college, house, etc.). For example, an individual might consider using certificates of deposit (CDs) to increase their savings, which have much higher interest rates than a traditional savings account. However, these vehicles have specified maturity times (3 months to 10 years), which an individual must save or incur early withdrawal penalties.
Dr. Heather Bono is the chairwoman and associate professor of finance in the accounting and finance department at the University of West Georgia. She has taught business statistics, consumer economics, microeconomics, personal finance, corporate finance and investments courses. Her research interests include real estate finance and economics, personal finance and student success.
Dr. Stephen Gray, D.B.A
Assistant Professor of Finance, Western Illinois University
See answers
What impact do factors like inflation and monetary policy have on the returns of high-yield savings accounts?
Returns on high-yield savings accounts are primarily influenced by inflation, the effects of which are seen when the Federal Reserve adjusts the federal funds rate up to reflect an increase in inflation, or down to indicate decreasing inflation. Changes in the economy, either positive or negative, can also impact the returns of high-yield savings accounts. A final dynamic that can affect returns is a financial institution's demand for loanable deposits; online banks may offer higher rates to attract more deposits to achieve a greater market presence, while brick-and-mortar banks may offer higher savings rates to obtain loanable deposits.
At what stage in a person’s life would you recommend they get a high-yield savings account?
A high-yield savings account is appropriate for any age. Even though reasons for opening a high-yield savings account may differ by age, the need for this type of account can be considered universal.
Are there any other savings vehicles or accounts that individuals should consider?
A primary consideration when determining the type of savings account for various savings goals is time horizon. Short-term savings goals (e.g., vacation, down payment on a home or car) necessitate that attention be given to liquidity of funds and preservation of capital, providing support for the use of high-yield savings accounts. Long-term savings goals (e.g., retirement) compel individuals to look for savings vehicles that will not only achieve returns that exceed inflation, but that result in growth of capital. Investments to consider for long-term savings goals include stocks, bonds, mutual funds and exchange-traded funds.
Dr. Stephen Gray is an assistant professor of finance in the department of accounting, finance, economics, and decision sciences at Western Illinois University. His teaching areas are personal finance, real estate, futures and options markets and portfolio management. Steve has been actively involved in the ownership and management of several small businesses. Steve earned his doctorate of business administration (DBA) in 2017 from the University of Wisconsin-Whitewater, an MBA in 1997 from Western Illinois University, and a bachelor’s degree in agriculture education in 1984, also from Western Illinois University.
Bryce Palar, D.B.A
Visiting Assistant Professor of Business, Augustana College
See answers
When are high-yield savings accounts worthwhile?
To have a significant impact in the short term, the average individual would need five-figures just in savings to make these products worthwhile, in my opinion. Short-term high-yield saving accounts are more of a feel-good product for most customers out there.
At what stage in a person’s life would you recommend they get a high-yield savings account?
Personally, high-yield savings accounts are not something I would encourage unless customers were able to commit at least $10,000 to the savings account and were able to leave it there with no concern. It may also be something to consider if the money contributed to this type of account was expected to be used within 12 to 24 months.
Are there any other savings vehicles or accounts that individuals should consider?
When I think of people needing to save money, earning money from saving is secondary. First, individuals need to have the discipline to save. This is hard for most. If you are a disciplined saver, then you can consider several products to make your money work for you. These would include CDs, IRAs, and of course, high-yield savings accounts, if you were to stay within the traditional banking realm. In order to maximize dollars earned on savings vehicles one needs to be able to set money aside and have the ability to leave it alone for a specified time, no matter which of the avenues you choose.
Bryce Palar is a visiting assistant professor of business at Augustana College. As a faculty member, he strives to help students tell the story of business and grow their confidence as decision-makers. He teaches several business, accounting and economics courses, and his research interests include ethics in financial decision-making and strategic competitiveness. He earned his earned his doctorate of business administration (DBA) from St. Ambrose University.
Our Methodology
Our team researched more than 100 of the country’s largest and most prominent financial institutions, collecting information on each provider’s account options, fees, rates, terms and customer experience. We then scored each firm based on the data points and metrics that matter most to potential customers. Read our full methodology.
Our list of the best high-yield savings accounts is made up of the nine banks, credit unions and fintech companies with the highest ratings in the savings account category of our reviews. The top accounts have APYs well over 4% and generally don’t charge monthly fees. These accounts also earned points for either having no minimum opening deposit or requiring less than $100.
*Rates accurate as of May 20, 2024. Rates may vary by location. APYs based on Houston for Citi and PNC Bank.
**Data accurate at time of publication
Editor’s Note: Before making significant financial decisions, consider reviewing your options with someoneyou trust, such as a financial adviser, credit counselor or financial professional, since every person’s situation and needs are different.
