Best High-Yield Savings Accounts 2021
High-yield savings accounts pay a competitive interest rate on your savings and can offer a range of other features and benefits. But what makes certain accounts rise to the level of being the best online high-yield account?
Investor.com spent seven months comparing more than 40 high-interest accounts, opening 19 test accounts for hands-on analysis, to determine what separates the average from the exceptional. Based on our research, here are the top five high-yield savings accounts:
Best High-Yield Savings Accounts for 2021
- SmartyPig from Sallie Mae - 0.70% APY on first $10,000 (0.45% after that)
- Comenity Direct High-Yield Savings Account - 0.55% APY
- Alliant High-Rate Savings - 0.55% APY
- Axos Bank High Yield Savings Account - 0.61% APY on first $24,999.99 (0.25 - 0.15% after that)
- Affirm Savings Account - 0.65% APY
Here’s what we looked for to narrow the list of options:
High interest: The goal for any saver is to eke out the highest amount of interest you can. During this historically low-interest-rate environment, no provider blew our socks off. But it’s all relative. We found that the best high-yield savings accounts offered an annual percentage yield, or APY, of 0.50% or higher. Although there were a few standouts — see Sally Mae SmartyPig’s 0.70% APY — note that interest rates on these accounts are variable and will change (up, please!) over time.
Zero fees: Fees are the scourge of savers, especially when deposits yield so little. It’s simple math. For example, one $5 fee immediately wipes out two months’ worth of the interest you’d earn on a $5,000 balance at a 0.60% APY. The good news is that the majority of the top banks we reviewed charged no monthly maintenance or other frivolous fees. Any ones they did charge were easily avoidable by, for example, signing up for electronic statements.
No minimum deposit or balance maintenance requirements: Some banks require a minimum deposit either to open a high-yield savings account or to be eligible for the advertised interest rate. Our research found that there are plenty of providers that require neither. Still, if you keep a flush balance, be aware of banks with tiered rates that pay lower APYs on higher dollar amounts.
Easy and convenient access: Today, maximum accessibility means hiccup-free online banking, a fully functional user-friendly app, 24/7 customer support (email, phone, chat) and a debit card for immediate access to cash. Surprise!: None of the banks we put through the paces (even the really good ones) have it all. But the best ones come pretty close.
Additional services to make savings easier: It's not enough to have a place to put your money; the features and benefits that make up your experience play a tremendous role as well. Banks that offered automated savings, the ability to bucket money to save for separate goals, budgeting tools, calculators, and educational content were tops in our esteem.
Other banking services: The availability of other banking services (checking accounts, loans, credit cards, CDs, retirement accounts) shouldn’t be a high priority when shopping for a high-rate savings account. But it can be a factor for those who prefer to consolidate their financial services. We scored providers on their entire suite of services, but weighted this factor lower than other more critical high-yield savings account features.
1. Sallie Mae SmartyPig
APY: 0.70% on first $10,000 (0.45% after that)
Minimum Deposit: $0
It’s all about the rate. The top priority for most people shopping around for a high-yield savings account, is, quite simply, getting the highest yield possible on your cash. Sallie Mae SmartyPig got that memo. Its standard 0.70% interest rate (even if limited to the first $10,000, changing to 0.45% on higher balances) helped it secure the top spot in our review of the best high-yield savings accounts of 2021. Additional savings tools and an incredible user experience reinforced SmartyPig’s No. 1 standing among the 19 savings accounts we put through the paces during our research. Read full review.
- Higher APY than competitors
- No minimum balance requirement
- No monthly maintenance fees
- Supports multiple savings goals
- Allows more than six withdrawals per month
- Online-only (no physical locations)
- Balances above $10,000 subject to lower (0.45%) interest rate
- Does not support mobile check deposit
2. Comenity Direct
Minimum Deposit: $100
Comenity Direct is like the stereotypically overlooked middle child. Its interest rate doesn’t steal the show (though decent, at 0.55%) and the $100 minimum opening deposit requirement can be a turnoff when most of the competition requires none. Where Comenity shines is its simple sign-up process, which lets you fund your high-yield savings account by the next business day. Read full review.
- Quick account setup
- $10 million deposit limit
- No monthly fees
- $100 minimum deposit requirement
- Online-only (no physical locations)
- No ATM card access
3. Alliant Credit Union
Minimum Deposit: $5
Thanks to the digital age, credit union membership is open to the masses. Alliant Credit Union has certainly grown beyond its “hometown-only” existence, earning one of the top spots in our lineup of the Best Savings Accounts for 2021. That’s thanks to Alliant’s competitive 0.55% interest rate, vibrant app, and solid website, plus some great goal-setting features to boot. Read full review.
- Account access via 80,000+ ATMs
- Open up to 19 supplemental savings accounts to track multiple goals
- 24/7 customer service, even on holidays
- $100 balance required to earn interest
- Credit union membership required (although it’s easy to qualify)
- $5 minimum account balance needed to keep your account open
- No physical branches
4. Axos Bank
APY: 0.61% on first $24,999.99 (0.25% after that, up to $100,000, and then 0.15%)
Minimum Deposit: $250
Axos brings a lot to the table as both a bank and a high-yield savings account. With high interest offered on its savings, checking, and money market accounts plus no monthly fees, it gives users who want to earn more a great opportunity to do so. Note that the interest rate, however, starts to dip if you stash away more than $25,000.
- Free optional debit card
- Optional interest-earning checking account
- Complete account dashboard customization
- Requires $250 minimum deposit
- No physical locations
Minimum Deposit: $0
Affirm isn’t your average bank; in fact, it’s not a bank at all. It’s a fintech company known primarily for its “buy now pay later” lending service (similar to Afterpay). But it also offers a high-yield savings account via a third party, Cross River Bank. The Affirm savings account interest rate is higher than what most traditional and nontraditional banks offer these days. Just don’t expect any extra features at Affirm; it’s a no-fee place to park some of your money, and not much more. Read full review.
- Offers a high interest rate relative to competitors
- No minimum deposit requirement
- No fees
- No physical branches; in-app application process only
- Limited deposit and withdrawal options
- Minimal financial tools
- No debit card
High-yield savings account rank and ratings
Investor.com collected more than 500 data points over seven months to score high-yield savings accounts on the factors that matter most to savers. Here's a ranked rundown of the top 19 and how each scored on a scale of 1-5:
|Bank||APY||Monthly Fees||User Experience||Features||Banking Services||Overall||Review|
|1. Sallie Mae SmartyPig||5.0||5.0||4.5||4.5||4.5||5.0||Read review|
|2. Comenity Direct||4.5||5.0||5.0||4.5||4.5||4.5||Read review|
|3. Alliant Credit Union||4.5||5.0||4.5||4.5||4.5||4.5||Read review|
|4. Axos Bank||4.5||5.0||4.0||4.5||4.5||4.5|
|5. Affirm||5.0||5.0||3.5||3.5||4.0||4.5||Read review|
|6. Live Oak Bank||4.5||5.0||3.5||4.0||4.5||4.5|
|7. Ally Bank||4.0||5.0||4.5||4.5||5.0||4.5||Read review|
|8. Vio Bank||4.5||5.0||3.5||4.0||4.5||4.5|
|9. CitiBank Accelerated Savings||4.0||4.5||4.0||4.5||4.5||4.0|
|10. Marcus by Goldman Sachs||4.0||5.0||4.0||4.5||4.5||4.0|
|11. Chime||4.0||5.0||3.0||4.5||4.5||4.0||Read full review|
|12. Capital One||3.0||5.0||4.5||4.0||4.5||3.5|
|13. Synchrony Bank||4.0||5.0||4.5||4.5||4.5||4.0|
|14. PNC Bank||3.0||5.0||4.0||4.5||4.5||3.5|
|15. Discover Bank||3.0||5.0||3.5||4.0||5.0||3.5|
|17. Citizens Access||3.0||5.0||3.5||3.0||4.5||3.5|
|18. American Express National Bank||3.0||5.0||3.5||3.0||4.5||3.0|
High-yield savings accounts summary
Investor.com analyzed and scored high-yield savings accounts offered by the following banks. Here (listed alphabetically) are their current yields and minimum deposit requirements.
|Alliant Credit Union||0.55%||$5|
|American Express National Bank||0.40%||$0|
|Axos Bank||0.61% APY on first $24,999.99 (0.25 - 0.15% after that)||$250|
|CitiBank Accelerated Savings||0.50%||$0|
|Live Oak Bank||0.50%||$0|
|Marcus by Goldman Sachs||0.50%||$0|
|Sallie Mae SmartyPig||0.70% on first $10,000 (0.45% after that)||$0|
How we Scored
For the 2021 investor.com first annual savings account review, we spent seven months collecting and analyzing 532 data points across 70 variables to score and rank high-yield savings accounts. Here’s how we tested.
What is a high-yield savings account?
An online high-yield savings account is more or less identical to a regular savings account, with one big difference: The interest you can earn in a high-yield account is up to 10 times more (or even higher) than the national average paid by regular savings accounts.
Like regular savings and checking accounts, online high-yield savings accounts are insured by the Federal Deposit Insurance Corp. (for banks) or the National Credit Union Administration (for credit unions). Secure transactions, online and/or mobile accessibility and customer service are typically also part of the package. Many banks also offer educational materials and tools to help savers, such as articles, calculators and automatic saving features.
What are the benefits of a high-yield savings account?
The biggest benefit is having a separate and safe place to park money that you don’t need to (or want to be tempted to) access every day, where it will earn a higher rate of return than you’d get elsewhere. A high-yield account is a great holding pen for an emergency fund, savings for an upcoming trip or home renovation, a child’s quarterly tuition payment and so on.
Here are some of the pros and cons of a high-yield savings account:
- Pays a much higher interest rate versus traditional savings and checking accounts.
- Easy to access (primarily online) and manage by linking to an external bank account.
- May come with an ATM card.
- The majority of accounts are federally insured.
- Subject to federally mandated withdrawal limits of six times per month (with some exceptions during COVID-19).
- Interest rates fluctuate based on the federal funds rate, unlike for certificates of deposit (CDs), where rates are locked in.
How much can I earn with a high-yield savings account?
The national average APY on a regular savings account is 0.06%, according to the FDIC, but there are national banks that pay many times that — anywhere from 0.40% to 0.70% interest. (See our top picks above. )
Note that interest rates on online high-yield savings accounts are not guaranteed forever; they are subject to change without notice at any time. Interest rates often fluctuate in accordance with the federal funds rate. Your earnings will depend on the going APY, your account balance and any associated account fees.
What bank has the best high-yield savings account?
Sallie Mae’s SmartyPig savings account features one of the highest interest rates of the 19 banks we analyzed — 0.70% on balances up to $10,000. The rate dips to 0.45% on amounts over $10,0000. It requires no minimum balance to open an account and charges no monthly fees.
How does a high-yield savings account work?
A high-yield savings account is much like a regular bank account: You deposit money and it earns interest. Currently, interest for a regular savings account sits around 0.06%, per the FDIC national average. A high-yield savings account allows you to earn many times that. Note that savings accounts have some drawbacks compared to, for example, checking accounts. Few high-yield savings accounts offer check-writing privileges or a debit card. And withdrawals from savings accounts are limited to six a month per federal regulation, unless otherwise stated.
How much interest will I get on $1,000 a year in a savings account?
The amount your balance earns depends on the interest rate the bank pays and how frequently it’s compounded. A single $1,000 investment can yield anywhere from $2 to $6.52 in a year:
|Annual return on $1,000 investment|
|Interest rate||Annual return (with daily compounding)|
We get it: The prospect of waiting patiently to earn less than seven big ones in a year hardly seems worth it. So let’s look at a few other ways to boost that number.
If you’re able to add $100 to your savings each month in an account that pays 0.65%, in a year you’ll be able to buy two fancy coffees (not ventis, mind you) with the $10.75 you earned in interest.
But let’s say you’re looking for a place to park your $10,000 emergency fund. This is money you theoretically won’t even touch unless you face a true emergency. Leave your cash sitting in a high-yield savings account for a year, and you’ll earn $65.19. In five years your account will have paid you $330.25. And in a decade, $671.04. If you left it in your regular savings account earning the national average of 0.06%, you’d earn only about $60.
Can you lose money in a high-yield savings account?
Technically, yes. Fees could eat away at the interest you earn on your savings. If left completely unchecked, they could even start eroding your principal (the money you deposit into the account).
For example, one $5 fee immediately wipes out two months’ worth of the interest you would have earned on a $5,000 balance at a bank paying a 0.60% APY. If the fee is charged monthly and you make no additional deposits into your account, you’ll start seeing your account balance slowly dwindle $5 at a time.
Is my money safe in a high-yield savings account?
It is if the bank carries insurance from either the FDIC (Federal Deposit Insurance Corporation) or the NCUA (National Credit Union Association), which offer coverage against loss due to bank failure on balances up to $250,000 per depositor, per insured bank, per ownership category. Most banks carry this coverage.
How do I choose a high-yield savings account?
When choosing a high-yield savings account, here are five main factors to review before you decide where to open an account.
- Annual percent yield (APY): The interest rate that is earned on your funds.
- Compounding method: The rate at which your interest compounds, either daily or monthly. Daily will accelerate the amount you earn in interest faster than monthly.
- Minimum deposit requirement: What is the amount needed to open (or keep open) your savings account? Also, see if there’s a balance required to earn a certain interest rate.
- Account fees: Are there any associated account fees such as monthly fees, paper statement fees, or outgoing wire transfer fees?
- Access: What are the rules around withdrawals and deposits? Most savings accounts limit withdrawals (or transfers out) to six per month. Does the account come with a debit card (few do)? How long do transfers take?
What is an annual percentage yield (APY)?
The APY, or annual percentage yield, is the growth mechanism for your savings. Few other factors will impact your savings as much as the amount in interest the bank pays on your deposits. The bigger the number, the faster your account balance will grow. Right now you can earn between 0.50% and 0.70% APY in a high-yield savings account. Nonplussed? Same; historically, there have been periods when rates were much higher. But based on the federal funds rate, it is what it is.
Here’s a fun fact for awkward conversational pauses: APY expresses the rate banks pay depositors on savings, whereas APR — annual percentage rate — refers to how much banks charge borrowers, like on a credit card balance.
How often do rates change?
Interest rates can change pretty quickly and without warning, mainly triggered by moves made by the Federal Reserve based on the nation’s financial health. High-yield savings account rates mirror the federal funds rate. When the Fed cuts the federal rate (as it did at the outset of the COVID-19 pandemic), banks tend to follow suit with APYs.
The Federal Reserve Open Market Committee holds regularly scheduled meetings to discuss regular rate changes, but it can also call meetings at random when deemed necessary.
How does compounding work?
Compounding is the vehicle used to multiply your savings and can happen, most commonly, in one of three ways; daily, monthly, and quarterly. The more frequently the interest on your savings compound, the more your money will multiply.
It’s worth noting that the rate at which interest compounds doesn’t have a significant impact on earnings. For example, in one month $10,000 earning 0.70% in interest compounded daily earns just $1.60 more than the same amount compounded monthly.
What fees do high-yield savings accounts charge?
High-yield savings account fees can vary by bank, but the most common include:
- Maintenance fees: Monthly fees charged to keep the account open. The top banks we reviewed don’t charge this. The few that do will waive the fee if you sign up for direct deposit.
- Transaction fees: These can be charged for wire transfers, having the bank cut a physical check, or for exceeding the federally mandated limit of six withdrawals/transfers out per month (unless the bank has waived the cap, as some did during the pandemic). If you need to make lots of withdrawals, transferring a lump sum into a checking account will help you avoid the fee.
- Paper statement fee: Digital statements are becoming the norm. If you request a paper statement, expect to pay a small fee.
- Inadequate balance fees: Charged if there is a minimum balance required to maintain an account and your balance drops below it. The bank may also have the right to close your account.
Should I open a high-yield savings account?
A high-yield savings account is good for money needed for near-term expenses that you don’t want to expose to the unpredictable short-term ups and downs of the stock market. For example:
- Emergency funds: It's wise to have at least three to six months' worth of savings put away in case of an emergency. While it's waiting for an inevitable rainy-day situation to arise, it could be earning interest.
- Weddings and other big planned expenses: The average wedding in America costs $30,433. Many folks save for several years to amass money to foot the bill. Same with home down payments, renovation savings, a child’s upcoming tuition money and any other large purchases on the docket.
- Savings you want to keep separate from your spending money: Out of sight, out of mind, right? If you have a hard time saving money, setting up automated transfers to a separate high-yield account at a bank that’s not your regular one will help. Plus, some high-APY banks have features that look for additional savings from your funding account to move automatically into your savings pool.
Money you need to access every day (to pay monthly bills, stop at the ATM for some carrying-around cash) does not belong in a high-yield savings account. That’s because savings accounts are subject to the Federal Reserve Board’s Regulation D, which limits withdrawals/transfers out to six per month. Plus, most high-yield accounts don’t come with an ATM card or check-writing privileges.
How do you open a high-yield savings account?
Most banks offer a simple sign-up process for high-yield savings accounts. A typical application process can be done primarily online and takes seven to 10 steps. You’ll be asked to provide some or all of the following:
- Name, address, email, and phone number.
- Date of birth, driver’s license or state identification number, Social Security number, proof of citizenship, employment information, annual income.
- Answers to security questions to verify your identity.
- Funding account information (bank name, routing number, account number) from which you’ll transfer money into the new account.
- Verification of the funding account. If the new bank does not use an automated account linking provider (e.g., Yodlee, Plaid) you’ll receive two small test deposits to verify the account is yours.
Although few banks require a minimum deposit to open an account or minimum amount to start earning interest, be aware that some do.
How is a high-yield savings account different from a money market account?
Money market accounts are savings accounts that offer interest rates similar to those of high-yield savings accounts, often with accessibility similar to that of a checking account, including checks and a debit card. The catch is that many money market accounts have a minimum deposit requirement, whereas most high-yield savings accounts do not.
Other things to look for in money market accounts: tiered interest rates, where the highest rate applies to higher account balances; and fees, particularly if your balance falls below the required minimum.
How is a high-yield savings account different from a CD?
Certificates of deposit, or CDs, pay a fixed rate of interest for a fixed period of time, usually a few months to several years. Typically, the longer the time frame, the higher the interest rate. The interest rate on a high-yield savings account is variable, meaning it can change at any time. Another difference between a high-yield savings account and a CD is accessibility. If you withdraw funds before the CD matures — that’s when it reaches the end of the guaranteed rate period — you’ll pay an early withdrawal penalty equal to a certain number of months of interest. With a high-yield savings account, you can access your money at any time without penalty, although federal rules limit the number of monthly withdrawals to six. (This rule was temporarily lifted during COVID-19.)
Bottom line, CDs are better for people who are looking for a guaranteed fixed rate of return for a defined period and don't mind forgoing accessibility to get it.
Are high-yield savings accounts worth it?
If you save money in any way using a bank account, a high-yield savings account is definitely worth it. High-yield savings accounts typically pay a higher interest rate than standard savings and checking accounts — anywhere from three to 11 times the national average. Plus, many accounts require no minimum balance to open and maintain and charge no fees.
Another advantage of a high-yield savings account is that it makes it easier to keep your money on task: Instead of relying on mental accounting, you have a separate account devoted to a particular savings goal. You can track your progress and will be less tempted to dip into the amount early, which can be an issue when your everyday spending money is mingled with your savings in a checking account.
Our mission at investor.com is simple: provide thorough and unbiased reviews of financial services products and providers.
For investor.com's best saving accounts review, published in August 2021, we collected a total of 532 data points over seven months to score and rank high-yield savings accounts. We assessed 19 banks across 70 variables spanning five core categories, including APY (annual percentage yield), monthly fees, user experience, account features and banking services.
All 19 institutions passed our initial screening criteria of having FDIC (for banks) or NCUA (for credit unions) insurance, online accessibility, and an interest rate above the 0.06% national average for savings accounts. To test quality and usability, we opened, funded and used each bank’s high-yield savings account for a minimum of three statement cycles. We performed basic account functions (deposits, withdrawals, transfers) on both the desktop and app versions (where applicable), scoured all fine print and disclosures, and had some lengthy phone calls with bank service reps.
Explore our other reviews:
- Sallie Mae SmartyPig review
- Comenity Direct review
- Alliant Credit Union review
- Affirm review
- Chime review
About the authors:
Ashlyn Brooks is a financial writer and former civil engineer. She's on a mission to show others how to save and spend smarter through purposeful money habits. Her work has been featured on HerMoney.com, MoneyGeek, and Top 10.com.
Dayana Yochim has been writing (articles, books, podcasts, stirring speeches) about personal finance and investing for more than two decades, focusing on bringing clarity and the occasional comedic aside to what is often a murky, humorless topic. She’s written for NerdWallet, The Motley Fool, HerMoney.com, Woman’s Day, Forbes, Newsweek and others, and been a guest expert on The Today Show, GMA, CNN, NPR and wherever they’ll hand her a mic.