If you’re earning a paltry interest rate with your current savings account, now’s the time to maximize your interest earnings with a high-yield savings account.
Some big banks offer as little as 0.01% annual percentage yield, or APY, but the top high-yield savings accounts earn APYs as high as 5.55% -- more than 10 times the national average. So, if you’re ready to grow your emergency fund or start a sinking fund, it’s time to move your funds into an HYSA. Otherwise, you’re leaving money on the table.
Key takeaways
- The best high-yield savings accounts earn up to 5.55% APY.
- After two years of significant highs for savings rates, APYs have likely leveled out after the Fed paused rate hikes at its last six FOMC meetings.
- With experts expecting rate cuts later this year, the sooner you open a high-yield savings account, the more interest you stand to earn.
Experts recommend comparing rates before opening a savings account to get the best APY possible. You can enter your information below to see CNET’s partners’ rates in your area.
Today’s best savings rates
Here are some of the top savings account APYs available right now:
Bank | APY | Min. deposit to open |
My Banking Direct | 5.55% | $500 |
TAB Bank | 5.27% | $0 |
Newtek Bank | 5.25% | $0 |
UFB Direct | 5.25% | $0 |
Synchrony Bank | 4.75% | $0 |
Capital One | 4.25% | $0 |
Discover Bank | 4.25% | $0 |
Ally Bank | 4.20% | $0 |
Will savings rates remain high in 2024?
The Federal Reserve has opted to keep the federal funds rate at a range of 5.25% to 5.50% at its last six meetings. As a result you can still find high-yield savings accounts with APYs as high as 5.55%.
Experts expected several rate cuts to happen later this year, which would prompt savings rates to follow suit. But the most recent Consumer Price Index report revealed inflation rose 3.4% year over year -- down slightly from March’s numbers but still stubbornly higher than the Fed’s 2% target rate. Inflation has eased significantly since 2022, but the timeline for future rate cuts is still unclear.
Some experts still think rate cuts are possible in 2024, according to Elaine King, a certified financial planner. However, some economists predict that rate cuts are now less likely to happen in 2024 unless inflation begins trending downward soon. Either way, you can expect high savings rates to stick around for the foreseeable future.
How Fed decisions affect savings rates
The Fed doesn’t directly impact savings rates, but its decisions have ripple effects. For instance, when the Fed raises rates, many banks increase their rates for traditional and high-yield savings accounts, said Lanesha Mohip, a corporate accountant, founder of the Polished CEO and CNET expert review board member. Inversely, when the Fed lowers rates, banks drop savings rates, too.
“When the Fed changes the rates, it impacts everything,” said Mohip. That includes borrowing and savings rates. While taking out a loan or paying back debt may be more expensive, the high rates can also put extra money in your savings.
Banks can change the interest rates on savings accounts at any time. Since savings rates are variable, your APY will likely go down once the Fed drops rates. But for now, many banks are holding rates steady in anticipation of what the Fed will do next. Based on CNET’s weekly tracking, here’s where rates stand compared to last week:
CNET Average Savings APY | Weekly Change* | FDIC Average |
4.88% | No change | 0.46% |
*Weekly percentage increase/decrease from May 13, 2024, to May 20, 2024.
Reasons to open a high-yield savings account right now
Where you keep your money matters. A high-yield savings account is a great place to park money reserved for your emergency fund or any short-term savings goals. It could also be a good place to stash monetary windfalls, such as your tax refund. Here’s what else makes HYSAs stand out:
- High rates: HYSAs often have APYs 10 times higher (or more) than the national average, as tracked by the Federal Deposit Insurance Corporation.
- Low or no fees: Monthly maintenance fees can eat into your savings. Many online banks can charge low or no fees thanks to their lower operating costs.
- Liquidity: You can access money in your HYSA anytime without penalty (as long as you mind any withdrawal limits).
- Accessibility: If you open an HYSA at an online bank, you’ll have 24/7 access through its mobile app. You may also have lots of customer service options, including by phone, online chat and secure messaging.
- Low risk: HYSAs are protected by federal deposit insurance if they’re held at an FDIC-insured bank or credit union insured by the National Credit Union Administration. That means your money is safe up to $250,000 per account holder, per account type.
Tips for choosing the best high-yield savings account
Some accounts have minimum deposit requirements, fees and other charges that can chip away at your savings. Here’s everything you should keep in mind when comparing savings accounts:
- Minimum deposit requirements: Some HYSAs require a minimum amount to open an account -- typically, from $25 to $100. Others don’t require anything.
- ATM access: Not every bank offers cash deposits and withdrawals. If you need regular ATM access, check to see if your bank offers ATM fee reimbursements or a wide range of in-network ATMs, said Mohip.
- Fees: Look out for fees for monthly maintenance, withdrawals and paper statements, said Mohip. The charges can eat into your balance.
- Accessibility: If you prefer in-person assistance, look for a bank with physical branches. If you’re comfortable managing your money digitally, consider an online bank.
- Withdrawal limits: Some banks charge an excess withdrawal fee if you make more than six monthly withdrawals. If you think you may need to make more, consider a bank without this limit.
- Federal deposit insurance: Make sure your bank or credit union is either insured with the FDIC or the NCUA. This way, your money is protected up to $250,000 per account holder, per category, if there’s a bank failure.
- Customer service: Choose a bank that’s responsive and makes it easy to get help with your account if you need it. Read online customer reviews and contact the bank’s customer service to get a feel for working with the bank.
Methodology
CNET reviewed savings accounts at more than 50 traditional and online banks, credit unions and financial institutions with nationwide services. Each account received a score between one (lowest) and five (highest). The savings accounts listed here are all insured up to $250,000 per person, per account category, per institution, by the FDIC or NCUA.
CNET evaluates the best savings accounts using a set of established criteria that compares annual percentage yields, monthly fees, minimum deposits or balances and access to physical branches. None of the banks on our list charge monthly maintenance fees. An account will rank higher for offering any of the following perks:
- Account bonuses
- Automated savings features
- Wealth management consulting/coaching services
- Cash deposits
- Extensive ATM networks and/or ATM rebates for out-of-network ATM use
A savings account may be rated lower if it doesn’t have an easy-to-navigate website or if it doesn’t offer helpful features like an ATM card. Accounts that impose restrictive residency requirements or fees for exceeding monthly transaction limits may also be rated lower.