Where to find high-yield savings accounts

High-yield savings accounts are offered by online banks, some credit unions, and a handful of brick-and-mortar banks. Online banks typically offer the highest rates because they have lower overhead costs than traditional banks with physical branches. Banks like Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank have consistently offered rates in the 4% to 5% range, though the exact rate changes weekly based on Federal Reserve decisions and bank competition.

Credit unions also compete for high-yield deposits. Some credit unions offer rates comparable to online banks, but you usually need to be a member first, which may require living or working in a specific area or joining an affinity group. Traditional banks with branches—Chase, Bank of America, Wells Fargo—typically offer rates well below 1%, so they are not competitive for savings unless you need in-person banking or have other accounts with them.

The rate you see advertised is the Annual Percentage Yield (APY), which includes compounding. Rates change frequently, sometimes weekly, so the rate you lock in today may not be the rate you earn next month. Most banks allow you to move money between accounts without penalty, so you can switch if a better rate appears elsewhere.

Key Takeaways

  • Online banks currently offer the highest rates on savings accounts, typically between 4% and 5% APY, while traditional brick-and-mortar banks offer less than 1%.
  • Rates change weekly and are set by each bank independently, so the rate you see today may be different in a few weeks.
  • Your deposits are insured up to $250,000 per account at FDIC-insured banks and up to $250,000 per account at NCUA-insured credit unions, so the bank's size does not affect your money's safety.
  • You can move money between banks without penalty, so switching to a higher rate is always an option if your current bank's rate drops.
  • Some online banks require a minimum deposit to open an account, while others have no minimum; check the bank's website for current requirements.

How to compare rates across banks

The only number that matters is the APY, not the interest rate alone. APY accounts for how often the bank compounds interest (usually daily), so a bank advertising a 4.75% APY will earn you more than one advertising a 4.75% interest rate compounded monthly. Most high-yield savings accounts compound daily, so the APY and the effective rate are nearly identical.

Check the bank's website directly rather than relying on comparison sites, because rates change so often that third-party listings lag behind. Write down the APY, the minimum deposit (if any), and whether the account has monthly fees. Most online banks charge no monthly maintenance fee, but some traditional banks do.

Also check whether the bank is FDIC-insured (for banks) or NCUA-insured (for credit unions). This is not about the rate—it is about safety. If the bank fails, the FDIC or NCUA guarantees your money up to $250,000 per account type at that institution. Every major online bank and credit union carries this insurance.

Online banks with competitive rates

Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank have been among the most consistent high-yield providers. Each has offered rates in the 4% to 5% range in recent months, though the exact rate shifts as the Federal Reserve raises or lowers its benchmark rate. None of these banks have monthly fees or minimum deposits.

Smaller online banks and fintech platforms also offer high-yield savings, sometimes with rates matching or exceeding the major names. Banks like LendingClub, Vio Bank, and Connexus Credit Union have appeared on high-rate lists, but their rates and terms can change more frequently than larger institutions. If you choose a smaller bank, verify it is FDIC or NCUA-insured before depositing money.

Traditional banks occasionally run promotional rates to attract new customers. These rates are usually higher than their standard rate but last only for a limited time (often three to six months). After the promotion ends, your rate drops to the bank's regular savings rate, which is typically much lower. Read the fine print to understand when the promotional period ends.

What happens when rates drop

When the Federal Reserve lowers its benchmark rate, banks lower their savings rates within days or weeks. Your money does not disappear, but the interest you earn each month shrinks. If you opened a high-yield account at 5% APY and the rate drops to 3%, you will earn less interest going forward, but the principal you deposited remains untouched.

This is why many people move their money when rates drop. If your bank's rate falls below competitors' rates, you can transfer your savings to a bank offering a better rate. The transfer usually takes three to five business days via ACH (automated clearing house), and your money is protected during the transfer because it is still insured at both banks.

Some people keep accounts at multiple banks to take advantage of different rates or to stay organized. For example, you might keep an emergency fund at one bank and a separate savings goal at another. As long as each account is at a different bank, each is insured separately up to $250,000.

Minimum deposits and account requirements

Most online banks have no minimum deposit to open a high-yield savings account. You can open an account with $1 and start earning interest immediately. Some banks require a minimum balance to earn the advertised rate—for example, you might need $25,000 to earn 4.75% APY, while balances under $25,000 earn 4.50%. Check the bank's website for the exact tiers.

Credit unions sometimes require membership before you can open an account, and membership may require a small deposit (often $5 to $25) into a share account. Once you are a member, you can open a savings account. Some credit unions allow anyone to join, while others restrict membership by location, employer, or affiliation.

A few banks require you to link a checking account or set up direct deposit to earn the highest rate. Read the terms carefully before opening an account, because these requirements can affect which bank makes sense for your situation.

Moving money between banks

Transferring money from one bank to another takes three to five business days via ACH. You initiate the transfer from your new bank by providing your old bank's routing number and your account number. The old bank verifies the request, and the money moves electronically. There is no fee for outgoing transfers at most banks.

Some banks allow you to transfer money the same day or next day if you use their mobile app or website, though the standard timeline is still three to five business days. If you need money urgently, withdraw it from an ATM or use a debit card instead of waiting for a transfer.

Your money is insured during the transfer because it is covered at both banks simultaneously. If the sending bank fails while your money is in transit, the FDIC or NCUA still protects it. You do not need to worry about losing money during a transfer.

Frequently Asked Questions

Can I withdraw money from a high-yield savings account anytime?

Yes. High-yield savings accounts have no withdrawal restrictions. You can take money out whenever you need it without penalty. The account is called a savings account, not a certificate of deposit (CD), so there is no lock-in period. Interest accrues daily, so withdrawing money early does not cost you anything beyond the interest you would have earned on that amount going forward.

What if the bank I choose goes out of business?

Your money is protected up to $250,000 per account at FDIC-insured banks and NCUA-insured credit unions. If the bank fails, the FDIC or NCUA pays you directly, usually within a few business days. You do not lose money because of a bank failure. Check the bank's website or the FDIC/NCUA website to confirm insurance coverage before depositing.

Do I pay taxes on the interest I earn?

Yes. Interest earned in a savings account is taxable income. At the end of the year, the bank sends you a 1099-INT form showing how much interest you earned. You report this on your tax return. If you earned $10 in interest, you owe taxes on that $10 at your ordinary income tax rate. High-yield accounts do not change your tax situation—you just earn more interest to report.

Is there a difference between a savings account and a money market account?

Money market accounts often offer similar rates to high-yield savings accounts but may require a higher minimum deposit and allow you to write checks or use a debit card. For most people, a high-yield savings account is simpler because it has fewer restrictions and lower minimums. Both are FDIC-insured and earn interest daily.

Can I open multiple high-yield savings accounts?

Yes. You can open accounts at multiple banks and each account is insured separately up to $250,000. Many people do this to organize money for different goals or to take advantage of different rates. There is no limit on the number of accounts you can have, and opening multiple accounts does not affect your credit score.