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:
Bread’s interest rate is an industry standout and its simple and fast sign-up process is a winner. However, it lacks the features of some of its competitors, such as ATM card usage, which means you’ll have to transfer money to an external account to have access to it. Read full review
Savings-only Synchrony offers a competitive interest rate, easy setup and ATM access with free withdrawals from in-network machines. But you’ll have to hold your checking account elsewhere; they’re not on offer.
Pros
Optional ATM/debit card access
Mobile check deposit
“Perks Reward Program” based on savings balance and customer tenure
A solid APY, a rich lineup of saver-friendly features and a great user experience elevate the SmartyPig savings account. There’s no ATM access or mobile check deposit. Read full review
Ally’s savings account is loaded with clever tools to help you build your savings, and it’s a good choice for those who want the convenience of conducting all banking business at a single institution. Downsides include no ATM access. Read full review
Pros
No monthly maintenance fees
Offers “Surprise Savings” and round-ups to encourage additional savings
Varo’s 5% APY on up to $5,000 of your savings requires jumping through some hoops (opening a general bank account and making $1,000 in monthly direct deposits) to earn the higher rate. Otherwise you'll earn just 3% on your entire balance, not just amounts above $5,000.
Pros
5% rate on balances up to $5,000
Automated savings features
Cons
Requires Varo bank account and $1K monthly direct deposit for 5% 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 the historically low-interest-rate environment of the past several years, no provider blew our socks off. Now rates have started to rise, and savers no longer have to settle for zero-point-something returns. The best high-yield savings accounts offer an annual percentage yield, or APY, of 4% or higher. It's important to note that interest rates on these accounts are variable and will change over time.
Zero fees: Fees are the scourge of savers, especially when deposits yield so little. It’s simple math. For example, a single $10 fee immediately wipes out an entire month’s worth of the interest you’d earn on a $5,000 balance earning a 2% 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. Bread Savings
APY: 5.15%
Bread Savings doesn't have the big-bank name recognition. In fact, until a recent rebrand, it was known as Comenity Direct. But its interest rate certainly stands out from the crowd. It would absolutely steal the show if it weren't for the lack of other features that could be a turnoff (e.g., no ATM card access, which requires an extra step to withdraw money; the $100 minimum opening deposit requirement). No big whoop if you’re not fazed by the minimum or having to transfer money to an external account for access. Where Bread Savings shines is its simple sign-up process, which enabled us to fund our high-yield savings test account by the next business day. Read full review.
Pros:
Competitive APY
Quick account setup
No monthly fees
Cons:
$100 minimum deposit requirement
Online-only (no physical locations)
Minimal account features
No ATM card access (requires transferring funds to an external account)
Synchrony’s a solid contender if you’re looking for a savings-only banking option (checking accounts aren’t offered). The mobile-only provider's APY helps it keep pace in what has become a competitive environment for savvy depositors. Plus, during our testing, we found account setup a breeze. If you need to dip into your savings, Synchrony offers an optional ATM card with its high-yield account with free withdrawals from machines in the Visa Plus and Accel networks. No in-network machine nearby? Synchrony reimburses up to $5 in out-of-network ATM fees per statement cycle — enough to cover one, maybe two, cheats a month.
Pros:
No monthly maintenance fees
Optional ATM/debit card (with PIN) access
Mobile check deposit
“Perks Reward Program” based on savings balance and customer tenure
Cons:
Not a full-service bank (e.g., no checking accounts)
Limited physical branches
3. Sallie Mae SmartyPig
APY: 4.25%
Minimum Deposit: $0
A top APY plus tons of tools plus delightful user experience — Sallie Mae's SmartyPig got the memo. Its 4.25% interest rate (which, until recently, ratcheted back for balances over $10,000) helped it secure a top spot in our review of the best high-yield savings accounts. Additional savings tools and an incredible user experience reinforced SmartyPig’s high standing among the 19 savings accounts we put through the paces during our tests. Read full review.
Pros:
No minimum balance requirement
No monthly maintenance fees
Supports multiple savings goals
Higher rate now applies to all balances
Cons:
Online-only (no physical locations)
No ATM access (requires transferring funds to an external account)
The Ally Online Savings Account is replete with tools to help you find “unused” money in the budget to pad your account balance. The 4.25% APY, although not as high as some of the others on our top-five list, provides enough extra incentive to dig through the couch cushions. Ally is also a good choice for those who want the convenience of conducting all banking business at a single institution since it offers everything from personal loans to investment accounts. Read full review.
Pros:
No monthly maintenance fees
Up to 10 digital envelopes to track multiple savings goals
Offers “Surprise Savings” and round-ups to encourage additional savings
APY: 5% on up to $5,000, 3% on amounts above that
Minimum Deposit: $0
The 5% APY offered in the Varo savings account requires making a deep commitment to the mobile-only bank — as in opening a non-interest-bearing Varo bank account to pair with the savings account. Take one extra step — sign up for at least $1,000 in qualifying direct deposits (not bank transfers) per month — and you’ll qualify for a blockbuster 5% APY on up to $5,000 of your savings, and 3% on amounts above that. (Math: On a five-grand balance, that’s $256 in interest in one year vs. $152 at the 3% rate.) Amounts above $5,000 earn the account’s standard 3% APY. Varo bases eligibility for the enhanced rate on the previous month’s activity. Fail to comply, and the APY drops back to 3% on your entire balance.
Pros:
Elevated 5% saving rate on balances up to $5,000
No monthly maintenance fees
Automated savings features (“Save Your Change” and “Save Your Pay”)
Cons:
Additional Varo bank account is required to open a savings account
$1,000 in monthly direct deposits required to qualify for higher APY
3% APY applies to balances above $5,000 or if account doesn't qualify for higher rate
No ATM access (requires transferring funds to an external account)
No physical branches
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.
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. The numbers represent how each provider scored on a scale of 1-5 in each category:
For the investor.com 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 12 times more than the national average paid by regular savings accounts. APYs on old-school, traditional savings accounts hover around 0.4%. High-yield accounts pay 3% to 5%.
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:
Pros:
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.
Cons:
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 0.42%, according to the FDIC, but there are national banks that pay many times that — anywhere from 0.61% to 5% interest. Some banks offer even higher rates for depositors who meet certain requirements. (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 current APY, your account balance and any associated account fees.
What bank has the best high-yield savings account?
Five banks earned the highest overall ratings when we tested 19 high-yield savings accounts: Bread Savings (offering a 5.15% APY), Synchrony Bank (4.75%), Sallie Mae SmartyPig (4.25%), Ally Bank (4.25%) and Varo (3%, with an available APY booster of 5% on up to $5,000 in savings). None charge monthly account maintenance fees and all are FDIC insured.
In our 2023 rankings, Bread Savings is the best high-yield savings account, thanks mainly to its high APY. This online-only bank offers one of the quickest sign-up processes in our hands-on research. (Same with Synchrony, another online-only provider.) Good to know: Bread requires a $100 minimum opening balance, and withdrawals require an extra step of transferring money to an external account. Unlike some of the other high-yield savings accounts we reviewed, Bread lacks nice-to-have savings and planning tools. For more details, read our Bread Savings review.
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 0.42%, 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. Although some high-yield savings accounts come with an ATM card or offer check-writing privileges, most have more restrictive access, requiring customers to electronically transfer money from the savings account to an external linked bank account, which can take several days to clear. Also, 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. In one year, a single $1,000 investment can yield anywhere from a few dollars and change in a traditional savings account to $30 or more in in a high-yield savings account:
Interest rate
Annual return (with daily compounding)
0.33%
$3.31
1%
$10.05
3%
$30.45
We get it: The prospect of waiting patiently to earn just thirty bucks in a year may not seem worth the hassle of opening a new account. So let’s look at a few other ways to boost that number.
If you’re able to add $100 to your initial $1,000 deposit each month in an account that pays a 3% APY, in a year you’ll be able to buy many rounds of fancy coffees (venti-sized, even!) with the $49 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 $305 in interest. In five years your account will have paid you $1,618. And in 10 years, $3,498. Left sitting in a regular savings account earning the national average of 0.33%, and in a decade you’d earn just $335 in interest.
Can you lose money in a high-yield savings account?
Technically, yes, you can lose money in a high-yield savings account. 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, a single $10 fee immediately wipes out an entire month’s worth of the interest you’d earn on a $5,000 balance at a 2% 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.
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 an ATM 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. Unlike simple interest, the APY calculation incorporates the effects of compound interest on your rate of return.
Why’s that important? Because when you deposit money in a savings account, you not only earn interest on your initial investment — you also earn interest on the interest you earn, thus inching up your real rate of return. (Score!) That’s what makes the APY a more accurate calculation of how much money you’ll earn over time.
When you’re shopping around for a place to park your cash, compare APYs (as well as other things like account fees and convenience). Keep in mind that APYs can be fixed (set for a specific term, like with CDs) or variable (as with high-yield savings accounts where rates fluctuate based on the Federal Funds rate).
» See more on what is an APY and ways to weave it into casual conversation.
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. Same goes when the Fed raises rates, as they have multiple times in recent memory.
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 year $10,000 earning 3% in interest compounded daily earns just 37 cents 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 (typically around $25 for outgoing 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 lifts the cap, as many did during the pandemic and continue to do so). If you need to make lots of withdrawals, transferring a lump sum into an external bank 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 due to inactivity.
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. (Note: Those restrictions were lifted during the pandemic, and some banks continue to allow more frequent withdrawals.) Plus, many 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 that can be completed primarily online in 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 (some banks accept an ITIN instead), 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.
A minimum deposit to open the account (if required).
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 pay out a higher interest rate (APY) on deposits than standard savings and checking accounts — many pay 12 times more than the national average. Plus, it's easy to find an account that requires 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 account early, which can be an issue when your everyday spending money is mingled with your savings in a checking account.
Do any online stockbrokers offer high-yield savings accounts?
Ally Bank, which ranked No. 4 in our review, is one of the few online stockbrokers to offer a dedicated high-yield savings account.
Methodology
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 originally in August 2021 and updated most recently in 2023, 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 0.42% 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.
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 "Today," "Good Morning America," CNN, NPR and wherever they’ll hand her a mic.
Carolyn Kimball is Managing Editor for Reink Media Group and the lead editor for content on investor.com. Carolyn has more than 20 years of writing and editing experience at major media outlets including NerdWallet, the Los Angeles Times and the San Jose Mercury News. She specializes in coverage of personal financial products and services, wielding her editing skills to clarify complex (some might say befuddling) topics to help consumers make informed decisions about their money.
Andrea Coombes has 20+ years of experience helping people reach their financial goals. Her personal finance articles have appeared in the Wall Street Journal, USA Today, MarketWatch, Forbes, and other publications, and she's shared her expertise on CBS, NPR, "Marketplace," and more. She's been a financial coach and certified consumer credit counselor, and is working on becoming a Certified Financial Planner. She knows that owning pets isn't necessarily the best financial decision; her dog and two cats would argue this point.
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