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Best High-Yield Savings Accounts for April 2024

If you’re serious about building your savings, consider a high-yield savings account.

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A high-yield savings account is a federally insured account to store your cash that will earn an annual percentage yield several times higher than the average savings account. Oftentimes, high-yield savings accounts are available at online-only banks or credit unions such as Ally, Alliant Credit Union or Panacea Financial that don’t maintain physical branches. 

As with traditional savings accounts, high-yield savings accounts earn a variable interest rate that can change at any time, and you can deposit or withdraw money as needed. It’s always a good idea to choose a high-yield savings account that doesn’t charge a monthly service fee or require a minimum balance.

Best High-Yield Savings Accounts
  • My Banking Direct 5.35% APY, $500 Min. deposit to open
  • TAB Bank 5.27% APY, $0 Min. deposit to open
  • Newtek Bank 5.25% APY, $0 Min. deposit to open
  • UFB Direct 5.25% APY, $0 Min. deposit to open
  • Bread Savings 5.15% APY, $100 Min. deposit to open
  • Bask Bank 5.10% APY, $0 Min. deposit to open
  • BMO Alto 5.10% APY, $0 Min. deposit to open
  • Laurel Road 5.00% APY, $0 Min. deposit to open
  • Zynlo Bank 5.00% APY, $10 Min. deposit to open
  • Synchrony Bank 4.75% APY, $0 Min. deposit to open
  • Citizens 4.50% APY, $0 Min. deposit to open
  • Quontic Bank 4.50% APY, $100 Min. deposit to open
  • Varo Bank 3.00% to 5.00% APY, $0 Min. deposit to open
Helpful Definitions
Savings account

A deposit account issued by banks, credit unions and neobanks used to store money and earn a small amount of interest. Typically, these accounts are insured for up to $250,000 per account owner, per institution.

High-yield savings account

An interest-bearing account similar to a traditional savings account that pays a much higher annual percentage yield, or APY, than the average savings account. They are also typically insured for up to $250,000 per account owner, per institution.

Certificate of deposit (CD)

A type of savings account in which a lump-sum deposit accrues interest at a fixed rate for a fixed term, usually with an early withdrawal penalty.

Money Market Account (MMA)

Similar to a savings account but with the added feature of check-writing privileges and a debit card to access cash, often with limitations on the number of monthly withdrawals.

Annual percentage yield (APY)

An interest rate that represents the return from the compounded interest you’ll earn in 12 months on your deposit. The higher the APY, the faster your money grows.

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Terms explained

Certificate of Deposit (CD)

A type of savings account in which a lump-sum deposit accrues interest at a fixed rate for a fixed term, usually with an early withdrawal penalty.

Checking

The core bank account used for financial transactions. Account holders use it to deposit money and withdraw funds as needed.

Savings

A deposit account issued by banks and credit unions used to deposit money and earn a small amount of interest. Typically insured for up to $250,000 per account owner.

Money Market Account (MMA)

Similar to a savings account but with the added feature of checking-writing privileges and debit card to access cash, with some limitations.

Annual Percentage Yield (APY)

A CD’s interest rate that represents the return from the compounded interest you’ll earn in 12 months on your deposit. The higher the APY, the faster your money grows.

Estimated earnings

An estimated calculation usually associated with determining how much you’ll receive from an interest-bearing account.

It looks like more people are building up their cash reserves, and that’s great news. The number of Americans with more money in emergency savings has risen, according to the 2024 Bankrate report on emergency savings. Nearly 1 in 3 Americans have more in emergency savings this year than last. 

Your emergency savings will grow faster if you open a high-yield savings account. Today’s top-paying savings accounts earn an annual percentage yield, or APY, of 4.5% or more. So, if your savings are languishing in an account with a low rate, you owe it to yourself to move to a high-yield account.

Compare the best high-yield savings accounts

Below, you’ll find some of the best high-yield savings accounts to increase your interest earnings and help you reach your savings goals faster.

Bank APY Min. deposit to open
My Banking Direct 5.35% $500
TAB Bank 5.27% $0
Newtek Bank 5.25% $0
UFB Direct 5.25% $0
Bread Savings 5.15% $100
Bask Bank 5.10% $0
BMO Alto 5.10% $0
Laurel Road 5.00% $0
Zynlo Bank 5.00% $10
Synchrony Bank 4.75% $0
Citizens 4.50% $0
Quontic Bank 4.50% $100
Varo Bank 3.00% to 5.00% $0

Best high-yield savings accounts by bank

My Banking Direct

4.5/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
5.0/5
Minimum deposit and fees
4.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
5.35%
Min. deposit to open
$500

My Banking Direct regularly adjusts its high-yield savings account rate while charging no maintenance fees, no minimum balance requirements and paying interest on all balances above $1. My Banking Direct is a subsidiary of New York Community Bank, one of the largest US regional banks. It doesn’t specify its wire transfer fees on its website or in its official account disclosures.

Overview

My Banking Direct regularly adjusts its high-yield savings account rate while charging no maintenance fees, no minimum balance requirements and paying interest on all balances above $1. My Banking Direct is a subsidiary of New York Community Bank, one of the largest US regional banks. It doesn’t specify its wire transfer fees on its website or in its official account disclosures.

TAB Bank

4.5/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
5.0/5
Minimum deposit and fees
5.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
5.27%
Min. deposit to open
$0

We like that TAB Bank’s high-yield savings account is pretty straightforward. No monthly maintenance fees, no minimum deposit or balance requirements and a highly competitive APY put TAB Bank at the top of the list of best high-yield savings accounts.

TAB Bank is an online-only bank that offers checking, savings, money market and CD accounts. Its checking account gives you cash-back rewards on your purchases, and it offers special bank accounts for truckers. We also like that this bank has extended customer service hours, including Saturdays, by calling 800-355-3063.

Overview

We like that TAB Bank’s high-yield savings account is pretty straightforward. No monthly maintenance fees, no minimum deposit or balance requirements and a highly competitive APY put TAB Bank at the top of the list of best high-yield savings accounts.

TAB Bank is an online-only bank that offers checking, savings, money market and CD accounts. Its checking account gives you cash-back rewards on your purchases, and it offers special bank accounts for truckers. We also like that this bank has extended customer service hours, including Saturdays, by calling 800-355-3063.

Newtek Bank

4.5/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
5.0/5
Minimum deposit and fees
5.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
5.25%
Min. deposit to open
$0

Newtek Bank is the online-only arm of Newtek One. Its competitive APY applies to all balance levels, but you’re limited to six withdrawals per statement cycle. This account doesn’t offer an ATM card. Cash access is available through linked accounts.

You can open as many personal banking accounts as needed and can manage them all through an online banking platform or mobile app. We also like that you can access live customer support 24/7. If you don’t want to manage your account online, or you find yourself needing to make more than six withdrawals a month, it’s best to consider other options.

Overview

Newtek Bank is the online-only arm of Newtek One. Its competitive APY applies to all balance levels, but you’re limited to six withdrawals per statement cycle. This account doesn’t offer an ATM card. Cash access is available through linked accounts.

You can open as many personal banking accounts as needed and can manage them all through an online banking platform or mobile app. We also like that you can access live customer support 24/7. If you don’t want to manage your account online, or you find yourself needing to make more than six withdrawals a month, it’s best to consider other options.

UFB Direct

4.6/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
5.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
5.25%
Min. deposit to open
$0

UFB Direct, an online bank, has consistently ranked near the top of our list each week for APY. That APY applies to all balances, and there are no minimum deposit or balance requirements. 

Unlike other high-yield savings accounts, UFB Direct’s savings account comes with a free ATM card. The account has a limit of six withdrawals a month, but that doesn’t apply to ATM transactions. You’ll also have mobile banking, which comes with mobile deposits and transfers.

Overview

UFB Direct, an online bank, has consistently ranked near the top of our list each week for APY. That APY applies to all balances, and there are no minimum deposit or balance requirements. 

Unlike other high-yield savings accounts, UFB Direct’s savings account comes with a free ATM card. The account has a limit of six withdrawals a month, but that doesn’t apply to ATM transactions. You’ll also have mobile banking, which comes with mobile deposits and transfers.

Bread Savings

4.2/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
4.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
5.15%
Min. deposit to open
$100

Formerly Comenity Direct, Bread Financial offers two savings options: certificates of deposit and a high-yield savings account. Its high-yield savings account boasts a competitive APY, but you must deposit at least $100 to get it.

There are no monthly maintenance fees, and you’ll have unlimited free deposits via mobile check, ACH transfer and wire transfer.

Overview

Formerly Comenity Direct, Bread Financial offers two savings options: certificates of deposit and a high-yield savings account. Its high-yield savings account boasts a competitive APY, but you must deposit at least $100 to get it.

There are no monthly maintenance fees, and you’ll have unlimited free deposits via mobile check, ACH transfer and wire transfer.

Bask Bank

4.5/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
5.0/5
Customer service
3.0/5
APY APY = Annual Percentage Yield.
5.10%
Min. deposit to open
$0

Bask Bank is an online-only bank that offers two savings products: a mileage account that awards American Airlines AAdvantage miles for your savings and an interest savings account that currently offers competitive APYs.

Even better, there are no monthly fees, no minimum balance requirements and no minimum initial deposit at Bask Bank -- though it reserves the right to close your account if it sits unfunded for 15 business days. Bask Bank allows six withdrawals from your account per month but does not provide any check requests. Outgoing wire transfers cost $35.

Overview

Bask Bank is an online-only bank that offers two savings products: a mileage account that awards American Airlines AAdvantage miles for your savings and an interest savings account that currently offers competitive APYs.

Even better, there are no monthly fees, no minimum balance requirements and no minimum initial deposit at Bask Bank -- though it reserves the right to close your account if it sits unfunded for 15 business days. Bask Bank allows six withdrawals from your account per month but does not provide any check requests. Outgoing wire transfers cost $35.

BMO Alto

4.4/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
5.0/5
Customer service
4.5/5
APY APY = Annual Percentage Yield.
5.10%
Min. deposit to open
$0

BMO Alto is the online-only arm of BMO Financial Group, the parent organization to BMO Harris Bank and Bank of the West. BMO Alto offers two deposit accounts: the BMO Alto Online Savings and the BMO Alto Certificate of Deposit.

In addition to earning a competitive APY, its savings account has no monthly fees, minimum initial deposit or minimum balance requirement. The unlimited number of transfers and withdrawals permitted is an added benefit.

This account is best paired with other bank accounts because it doesn’t provide a debit card or ATM access. Money in this account can only be accessed or deposited through externally linked bank accounts.

Overview

BMO Alto is the online-only arm of BMO Financial Group, the parent organization to BMO Harris Bank and Bank of the West. BMO Alto offers two deposit accounts: the BMO Alto Online Savings and the BMO Alto Certificate of Deposit.

In addition to earning a competitive APY, its savings account has no monthly fees, minimum initial deposit or minimum balance requirement. The unlimited number of transfers and withdrawals permitted is an added benefit.

This account is best paired with other bank accounts because it doesn’t provide a debit card or ATM access. Money in this account can only be accessed or deposited through externally linked bank accounts.

Laurel Road

4.6/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
5/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
5.00%
Min. deposit to open
$0

Laurel Road is the digital arm of KeyBank. Its savings account doesn’t require a minimum deposit or balance to earn its top APY, but it doesn’t accept cash deposits. For that, you’ll need to transfer funds and manage your account online.

Laurel Road began as a student loan originator in 2013. As of 2019, it was acquired by KeyBank and now offers checking, savings and loan products primarily geared toward health care and business professionals nationwide. Its digital platform merges technology with banking services to offer a high-yield rate that applies to the entire balance.

Overview

Laurel Road is the digital arm of KeyBank. Its savings account doesn’t require a minimum deposit or balance to earn its top APY, but it doesn’t accept cash deposits. For that, you’ll need to transfer funds and manage your account online.

Laurel Road began as a student loan originator in 2013. As of 2019, it was acquired by KeyBank and now offers checking, savings and loan products primarily geared toward health care and business professionals nationwide. Its digital platform merges technology with banking services to offer a high-yield rate that applies to the entire balance.

Zynlo Bank

4.3/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
4.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
5.00%
Min. deposit to open
$10

Zynlo Bank, backed by PeoplesBank, is a relative newcomer to the online banking industry -- it launched in May 2020. It offers competitive yields for its checking, savings and money market accounts. And you can reach a customer service representative 24/7.

You must deposit at least $10 to open a savings account, but there are no monthly fees, and you have access to over 55,000 fee-free ATMs through the Allpoint network. The savings account is also equipped with tools to help grow your savings. Custom savings folders help you organize your savings goals, while roundup and matching features in conjunction with a checking account add to savings automatically.

The cherry on top is the extended account insurance. All balances beyond the $250,000 FDIC insurance limits are covered by Zynlo Bank in cases of bank failure.

Overview

Zynlo Bank, backed by PeoplesBank, is a relative newcomer to the online banking industry -- it launched in May 2020. It offers competitive yields for its checking, savings and money market accounts. And you can reach a customer service representative 24/7.

You must deposit at least $10 to open a savings account, but there are no monthly fees, and you have access to over 55,000 fee-free ATMs through the Allpoint network. The savings account is also equipped with tools to help grow your savings. Custom savings folders help you organize your savings goals, while roundup and matching features in conjunction with a checking account add to savings automatically.

The cherry on top is the extended account insurance. All balances beyond the $250,000 FDIC insurance limits are covered by Zynlo Bank in cases of bank failure.

4.6/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
5.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
4.75%
Min. deposit to open
$0

Synchrony Bank is a regular on our list of the best online banks. We like that it offers competitive APYs and extended customer service hours. Its high-yield savings consistently features a competitive APY with no monthly fees or minimum balance requirements.

While there’s no complementary checking account option at Synchrony, its savings accounts have debit cards you can use to withdraw money from ATMs. Synchrony doesn’t charge for non-network ATMs and reimburses $5 per month for other banks’ ATM fees. However, it doesn’t accept cash deposits.

Other savings options are available, including money market accounts, CDs and a few retirement options.

Overview

Synchrony Bank is a regular on our list of the best online banks. We like that it offers competitive APYs and extended customer service hours. Its high-yield savings consistently features a competitive APY with no monthly fees or minimum balance requirements.

While there’s no complementary checking account option at Synchrony, its savings accounts have debit cards you can use to withdraw money from ATMs. Synchrony doesn’t charge for non-network ATMs and reimburses $5 per month for other banks’ ATM fees. However, it doesn’t accept cash deposits.

Other savings options are available, including money market accounts, CDs and a few retirement options.

Citizens

3.5/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.0/5
Minimum deposit and fees
4.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
4.50%
Min. deposit to open
$0

Citizens’ high-yield savings account -- Citizens Access Savings -- has a respectable APY and no hidden fees. Like many other savings accounts, you can make direct deposits and recurring transfers. However, you can’t deposit cash.

Citizens is the digital banking arm of Citizens Bank, a traditional bank that’s now officially Citizens Financial Group. However, Citizens operates only online and mostly provides home loans, student loan refinancing and a high-yield savings account. No checking or money market accounts are available.

Overview

Citizens’ high-yield savings account -- Citizens Access Savings -- has a respectable APY and no hidden fees. Like many other savings accounts, you can make direct deposits and recurring transfers. However, you can’t deposit cash.

Citizens is the digital banking arm of Citizens Bank, a traditional bank that’s now officially Citizens Financial Group. However, Citizens operates only online and mostly provides home loans, student loan refinancing and a high-yield savings account. No checking or money market accounts are available.

4.5/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
4.0/5
Customer service
4.0/5
APY APY = Annual Percentage Yield.
4.50%
Min. deposit to open
$100

Quontic Bank keeps pace with competitors with a solid APY that applies to all balances. Quontic has no monthly maintenance fees or minimum balance requirements, though it requires $100 to open a high-yield savings account.

Quontic compounds interest daily and pays it out monthly – which can earn you more than accounts that only compound monthly. It charges $25 for outgoing domestic wire transfers and $35 for outgoing international wire transfers. All ACH transfers and incoming wire deposits are free.

Overview

Quontic Bank keeps pace with competitors with a solid APY that applies to all balances. Quontic has no monthly maintenance fees or minimum balance requirements, though it requires $100 to open a high-yield savings account.

Quontic compounds interest daily and pays it out monthly – which can earn you more than accounts that only compound monthly. It charges $25 for outgoing domestic wire transfers and $35 for outgoing international wire transfers. All ACH transfers and incoming wire deposits are free.

Varo Bank

4.6/5
How do we score savings accounts We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
APY
4.5/5
Minimum deposit and fees
5.0/5
Customer service
2.5/5
APY APY = Annual Percentage Yield.
3.00% to 5.00%
Min. deposit to open
$0

Varo is the wild card on our list for providing a tiered savings rate that encourages low balances. Varo will give you 5.00% APY if your daily balance never goes over $5,000 during a monthly billing cycle. If it exceeds $5,000, you’ll get only 3.00% APY on the excess amount for that month.

To qualify for any interest at all, you’ll need to have $1,000 in direct deposits every month and end each month with a positive balance in both your Varo Bank and Savings account. While Varo presents a tempting APY for those with lower balances, any amount in your account that exceeds $5,000 earns the lower APY.

Aside from its high-yield savings account, Varo has a checking account with a few sweet perks. You can earn cash back and get your paycheck two days sooner. Keep in mind that Varo is an online bank, so there are no physical branches available to manage your account.

Overview

Varo is the wild card on our list for providing a tiered savings rate that encourages low balances. Varo will give you 5.00% APY if your daily balance never goes over $5,000 during a monthly billing cycle. If it exceeds $5,000, you’ll get only 3.00% APY on the excess amount for that month.

To qualify for any interest at all, you’ll need to have $1,000 in direct deposits every month and end each month with a positive balance in both your Varo Bank and Savings account. While Varo presents a tempting APY for those with lower balances, any amount in your account that exceeds $5,000 earns the lower APY.

Aside from its high-yield savings account, Varo has a checking account with a few sweet perks. You can earn cash back and get your paycheck two days sooner. Keep in mind that Varo is an online bank, so there are no physical branches available to manage your account.

What is a high-yield savings account?

A high-yield savings account, or HYSA, is a type of savings account that offers interest rates at least 10 times higher than the national average. Most HYSAs are found at online-only banks. Since online banks don’t have the overhead costs of maintaining physical branches, they pass some of these savings down to customers in the form of lower fees and better APYs on savings, certificates of deposit and money market accounts.

With the highest rates continuing to hover above 5% APY, transferring some or all of your savings to a high-yield savings account could definitely pay off.

While many high-yield savings accounts offer high APYs on your full balance, some banks cap the amount of money you can earn at this rate. For instance, Digital Federal Credit Union offers an impressive 6.17% APY on its high-yield savings account -- but only on balances up to $1,000. Any balances over that receive a paltry 0.15% APY.

And, in some cases, banks might require a higher minimum deposit to be eligible for the higher APY.

What experts are saying about high-yield savings accounts

What the experts are saying
Rita-Soledad

Rita-Soledad Fernandez Paulino

Money coach and founder of Wealth Para Todos

Anna

Anna N’Jie-Konte

Certified financial planner and director of Re-Envision Wealth

Shang

Shang Saavedra

Personal finance coach and CEO of Save My Cents

We spoke with financial experts to learn the best way to use high-yield savings accounts, what to look out for and additional tips and guidance in the current rate environment. 

Savings rates are soaring. Anna N’Jie-Konte, a certified financial planner, recommends a high-yield savings account for anyone looking for flexibility and easy access to their money -- especially to house an emergency fund.

“High yield savings accounts should always be a mainstay for emergency funds.”

Currently, some of the best high-yield savings accounts offer APYs as high as 5.35%. Compare this to some traditional savings accounts, which offer APYs as low as 0.01%, and you’ll see the real value. For example, if you deposit $100 a month into a high-yield savings account for a year with a 5% APY, you’ll earn about $28 in interest (if rates stay the same). If rates go up, you’ll get a bigger return. If you deposit the same amount in a traditional savings account with a 0.01% APY, you’ll only earn $1.

If you’re looking for ways to grow your money faster, you’re not alone. Shang Saavedra, the founder and CEO of Save My Cents, says her followers have been asking her more questions about how high-yield savings accounts work. “The rates are so attractive that some people see it as an investment product,” Saavedra added.

Since the best rates are often at online-only banks, you’ll need to feel comfortable managing your money online. Many online bank names may feel unfamiliar, so Saavedra encourages her followers to read reviews, ask questions and do their research to get more acquainted with how an online bank operates. Most importantly, she suggests ensuring the bank is insured by the Federal Deposit Insurance Corp. or the National Credit Union Administration to protect your funds up to $250,000 per person, per institution.

Don’t assume a high-yield savings APY applies for all balances. Some banks have balance requirements to earn the highest interest rate, while others keep it straightforward, said Rita-Soledad Fernandez Paulino, founder of Wealth Para Todos. For instance, a bank may only offer a 5% APY on up to $3,000 or if you deposit that amount when opening the account. “I prefer to work with a bank that gives me an interest rate that’s going to be the same for all my money,” she said. “Always read the fine print.”

Lastly, don’t expect 5% high-yield savings rates to stick around long-term. Savings APYs are variable and often move in lockstep with the federal funds rate. The Federal Reserve has raised rates 11 times since March 2022 to tamp down on staggering inflation. While that’s boosted savings rates, it’s also raised interest rates on consumer loan products, including credit cards, personal loans, home equity loans and home equity lines of credit. When borrowing rates are high, it makes financing more expensive and difficult for households and businesses, which plays a role in slowing economic growth. 

“Right now, we might be in an environment with really, really high interest rates. But by default, the Fed doesn’t like to stay there,” said Delyanne Barros, founder of The Money Coach.

The Feds may cut interest rates at some point this year. As such, experts don’t expect savings rates to climb much higher. If you aren’t earning over 4% on your savings account, you should consider switching to a high-yield account to earn a better return while rates are high.

Read more: Types of Savings Accounts Compared

What a high-yield savings account is best for

A high-yield savings account is a great place to park money dedicated to short-term savings goals. Here are a few ways you might use a HYSA:

  • Emergency fund: Your emergency fund provides an extra layer of security against unexpected expenses, and it should always be in a high-yield savings account, Soledad said. You’ll have access to the money when you need it, and you can make regular contributions over time to prepare for an unforeseen event, such as a layoff or medical bill. You should keep your emergency fund separate from any other savings goals and only pull funds from this account to cover essentials such as housing costs, bills, medical care or an unexpected expense.
  • Sinking fund: A sinking fund is a way to set aside savings for a short-term goal, such as holiday gifts or a concert. It’s money you save for a specific upcoming expense, Soledad said. You can open separate high-yield savings accounts or use a bank such as Ally that offers savings buckets to help organize and separate savings goals within one account. You may set up automatic transfers or contribute occasionally to reach your goal. That way, when it’s time for your purchase, you’ll have the money you need without overspending or taking on debt.
  • Money you haven’t earmarked yet: If you’re unsure about how you want to use some funds, you may keep the money in a high-yield savings account to earn interest while you decide. When you’re ready, you can move the funds to the right account or goal -- whether you choose to invest, start a new sinking fund or spend the money.

You shouldn’t use a HYSA as your primary retirement savings vehicle. Although APYs are higher than they’ve been in years, they can’t compete with the compounding interest rates of the stock market. Your main retirement fund should be parked in a 401(k), IRA or other tax-advantaged growth account. But that doesn’t mean you shouldn’t park extra funds in a high-yield savings account as you approach retirement age.

“I’m planning to have two to three years of expenses saved [in a high-yield savings account] by the time I retire. Because if for some reason the market crashes the year that I retire, I don’t want to be pulling out of my investments that year,” Barros said. “That’s when a high-yield savings account or a regular savings account becomes something even more vital to your portfolio.” 

The strategy can be helpful so you don’t have to sell your investment assets at reduced prices, echoes Soledad. “If you only have one or two years left before retiring, I suggest you balance between saving in products that provide a guaranteed rate of return,” she said. That can include high-yield savings accounts, CDs, bonds and investments you don’t plan to sell for at least three years.

What to look for when opening a high-yield savings account

Keep these factors in mind when comparing your high-yield savings account options.

Deposits and withdrawals

Since most high-yield savings are at online banks, make sure you understand the ways you can deposit and withdraw your money. Aside from direct deposit and transfers from other bank accounts, most banks with online access offer mobile check deposit, which lets you take a photo of your check to scan and deposit it into your account. Just watch out for mobile check deposit limits, Soledad said. Sometimes you can’t exceed a limit of $5,000, for example. If your check is larger than the limit, you can often deposit the money into your checking account and then transfer it.

Some high-yield savings accounts may offer cash deposits at ATMs, but many don’t. This can pose a challenge if you regularly receive money in cash. In this case, depositing into a separate bank account and transferring it to your savings account may work well, but it will take more time. 

Savings goals and features

Many high-yield savings accounts offer ways to earmark money for different savings goals.

“I’m a big fan of Ally because I like their buckets feature,” Soledad said. Ally Bank lets you keep your money in one account, while clearly categorizing it for different savings goals. “Not all high-yield savings accounts have this bucket feature where you can categorize your money.” However, you could also open multiple savings accounts to keep your financial goals separate.

“The ability to categorize your savings so that you can set up sinking funds is very beneficial,” Soledad said. However, some banks will limit how many accounts you can link, she added. For instance, you may have a checking account and several savings accounts to track your goals individually. 

If you have multiple accounts, make sure your high-yield savings account is linked to the primary account where your paycheck or other income is deposited so you can easily transfer funds.

Withdrawal limits 

If several emergency expenses pop up in a row, you might find yourself tapping into your savings multiple times in a given month. “Look out for how many times you can pull money out a month for this account,” Soledad said.

Although Regulation D (PDF), which limited savings account transfers to six per month, was indefinitely suspended by the Federal Reserve, some banks still adhere to this limit. That means if you exceed this number of transfers, you may be charged an excessive transfer fee. The charge can vary by bank but is usually $10 for each transaction that exceeds the limit.

Pros and cons of high-yield savings accounts 

Experts often recommend high-yield savings accounts as a low-risk way to save money, but there are some drawbacks to consider. Here are a few pros and cons to weigh.

Pros

  • Higher interest: Usually, high-yield savings accounts have higher APYs than traditional savings and checking accounts -- which can yield a bigger return. 

  • Flexibility: You can withdraw money when you need it; it’s not locked in for a set term like a certificate of deposit.

  • FDIC-insured: As long as your high-yield savings account is at a bank that’s FDIC- or NCUA-insured, your money is protected for up to $250,000 per person, per account.

  • Can help curb spending: Money that is out of sight is often out of mind. Keeping extra funds in an HYSA can help prevent you from spending on nonessentials.

Cons

  • Limited or no physical bank access: Usually, only online-only banks offer high-yield savings accounts, so you’ll need to be comfortable managing your account online.

  • Transfer time: It can take one to three business days to transfer money from your savings to an external bank account.

  • Withdrawal limits and fees: Some banks may limit your withdrawals to six per statement cycle before charging an excessive withdrawal fee.

  • Variable interest rate: You won’t lock in a fixed savings rate like you can with a CD. Instead, your APY could change anytime.

Alternatives to high-yield savings accounts

In general, there are three savings account options if you’re looking for an alternative to high-yield savings accounts.

Traditional savings account: A traditional savings account is typically offered by a brick-and-mortar bank or local credit union. You won’t earn much interest compared with high-yield savings accounts, but you will have ATM access to make cash deposits and withdrawals. Some of these accounts are limited to six monthly withdrawals, although ATM withdrawals may be excluded from that restriction.

Money market account: A money market account combines features of a checking and savings account. This account usually requires a higher balance to earn interest and keep your account in good standing. And you may only be able to make a limited number of withdrawals per month. However, many money market accounts come with checking account features, such as a debit card, ATM access and check writing privileges.

Certificates of deposit: A certificate of deposit, or CD, offers a fixed interest rate for a set period, known as the term. If you withdraw your money before the term ends, you’ll pay an early withdrawal penalty, which is usually a few weeks or months of interest, depending on the bank. And CDs only allow a one-time deposit. Most CDs have terms from three months to five years.

How to open a high-yield savings account 

You can typically open a high-yield savings account online in a matter of minutes. While the steps may vary by bank, here’s what the process generally looks like.

  • Compare your options: Before opening an account, review different banks, features, rates and requirements to make sure you’re choosing the right fit for your financial situation. 
  • Apply: You’ll likely apply online, but you may be able to apply in person if your bank has physical branches. You’ll typically need to provide your Social Security number, physical address and contact information for your application. If you don’t have an SSN, some banks may allow you to open an account with an Individual Taxpayer Identification Number, or ITIN. Some banks may also require you to link your account and routing numbers from another account or financial institution to transfer your funds. 
  • Make a deposit: Depending on the bank, you may need to make a minimum deposit when opening the account. If not, you can transfer money when you’re ready. Most banks allow bank transfers, automated clearing house transfers and mobile check deposits.

FAQs

High-yield savings accounts are good for anyone saving for emergencies or short-term savings goals, such as car repairs or a vacation. It’s also a great place to put unexpected financial windfalls, such as a tax refund or inheritance, while you decide whether you want to save, invest or spend the money.

While each bank has a proprietary methodology for establishing APYs, many high-yield savings accounts are loosely connected to the federal funds rate -- the interest rate at which banks lend to each other. If the Fed decides to cut the federal funds rate this year, APYs for deposit accounts such as savings accounts and CDs will likely begin to drop also.

While APYs for high-yield savings accounts have remained elevated -- rates surpass 5% for many banks -- experts believe that rates have peaked. If the Fed begins to cut its federal funds rate, banks will likely follow suit and begin to drop APYs. Economic conditions will determine if or when rate cuts begin. Until then, it’s best to take advantage of the competitive rates while they last.

Experts predict rates will remain elevated while the Fed keeps interest rates high to combat inflation. They expect the Fed will begin cutting rates in mid-to-late 2024, and if it does, savings account APYs are likely to drop, too.

Methodology

CNET regularly reviews and tracks the annual percentage yields of savings accounts at banks, credit unions and financial institutions with nationwide access. None of the banks on this list charge monthly maintenance fees. Each account, which has been scored between one (lowest) and five (highest), is insured up to $250,000 per person, per account category, per institution by the Federal Deposit Insurance Corporation or National Credit Union Administration.

We review the APYs from the top 25 financial institutions on a weekly basis and compare them to the FDIC’s national average rate as well as the average APY of these banks, credit unions and financial institutions. Banks that score highest in our ranking offer an APY that is at least 10% higher than our CNET average and 10 times higher than the FDIC’s national average rate.

The banks, credit unions and neobanks we reviewed include: Affirm Savings, Alliant Credit Union, Ally, America First Credit Union, American Express High Yield Savings Account, Axos High Yield Savings, Bank of America Advantage Savings, Bank of the West, Bank5 Connect, Barclays, Bask Bank, Bread Savings, BrioDirect High-Yield Savings, Capital One 360 Checking, Charles Schwab, Chase Premier Savings, Chime, Citibank, Citizens Online Savings Account, Colorado Federal Savings Bank, Consumers Credit Union, Discover, First Internet Bank of Indiana, LendingClub, Live Oak Bank, M&T Bank, Marcus, My Banking Direct, Nationwide My Savings, Navy Federal Credit Union, NBKC, OneUnited Bank, PenFed CU, PNC, Popular Direct Select Savings, PurePoint Financial, Quontic Bank, Rising Bank, Salem Five Direct, Sally Mae Smarty Pig, Santander Bank, Synchrony, TAB Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, USAA Bank, Varo, Vio and Wells Fargo.

Dashia is a staff editor for CNET Money who covers all angles of personal finance, including credit cards and banking. From reviews to news coverage, she aims to help readers make more informed decisions about their money. Dashia was previously a staff writer at NextAdvisor, where she covered credit cards, taxes, banking B2B payments. She has also written about safety, home automation, technology and fintech.
Toni Husbands is a staff writer with CNET Money who enjoys exploring topics that promote financial wellness. She began writing about personal finance to document her experience paying off $107,000 of debt, which is detailed in her book, The Great Debt Dump. Previously, she contributed as a freelance writer for websites, including CreditCards.com, Centsai and Wisebread. She was also a regular contributor to Business AM TV, and her work has been featured on Yahoo News. Being a part-time real estate investor and amateur gardener also brings her joy.
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