The bank with the highest rate changes weekly, and it's almost never a bank you've heard of

The highest interest rates on savings accounts come from online banks and credit unions, not from Chase, Bank of America, or Wells Fargo. As of now, rates range from about 4.5% to 5.35% APY depending on the bank and account type, but these rates shift constantly as the Federal Reserve adjusts its benchmark rate. The bank offering the absolute highest rate this week may drop its rate next week, so comparing rates on the day you plan to deposit money matters more than finding a single "best" bank.

Traditional brick-and-mortar banks typically pay 0.01% to 0.5% APY on savings accounts because they have physical branches, staff, and overhead costs. Online banks like Marcus, Ally, and American Express Personal Savings have lower costs and pass some of that savings to depositors through higher rates. Credit unions, which are member-owned rather than shareholder-owned, often pay competitive rates as well. The trade-off is that you cannot walk into a branch to deposit cash or speak to someone in person—everything happens online or by mail.

Key Takeaways

  • Online banks and credit unions consistently offer rates 10 to 50 times higher than traditional banks, but rates change frequently and vary by account type.
  • The highest rates are usually found on high-yield savings accounts (HYSA) and money market accounts, not regular savings accounts.
  • Rate comparison sites like Bankrate, DepositAccounts, and the FDIC's BankFind tool let you see current rates across multiple banks on any given day.
  • Your money is insured up to $250,000 per account type per bank through FDIC insurance (for banks) or NCUA insurance (for credit unions), regardless of the interest rate.
  • A bank's rate can drop suddenly if the Federal Reserve cuts rates, so locking in a high rate now does not may provide that rate will stay the same.

How to find the current highest rate

The fastest way to see which bank is paying the most right now is to visit a rate comparison site. Bankrate, DepositAccounts, and DepositAccounts.com all update rates daily and let you filter by account type (savings, money market, CD) and minimum deposit. The FDIC's BankFind tool shows rates for FDIC-insured banks only. Credit union rates are harder to compare in one place, but the CO-OP Network and Alliant Credit Union's website both list rates for their members.

When you compare, pay attention to the minimum deposit required. Some banks offer their highest rate only if you deposit $25,000 or more. Others have no minimum. Also check whether the rate applies to new deposits only or to your entire balance—some banks pay a promotional rate for the first few months, then drop it. Read the fine print before you move money.

Online banks that consistently rank near the top

Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank have held competitive rates for several years. None of these is the absolute highest every single day, but all four regularly appear in the top five. Each has different features: Marcus has no minimum deposit and no monthly fees. Ally offers a debit card and checking account alongside savings. American Express requires you to be a cardholder. Discover requires a $25,000 minimum for some of its highest rates.

Smaller online banks like Vio Bank, Connexus Credit Union, and Bask Bank sometimes offer rates slightly higher than the big names, but they have fewer customers and less brand recognition. If you choose a smaller bank, verify that it is FDIC-insured (for banks) or NCUA-insured (for credit unions) before depositing money. You can check FDIC insurance status on BankFind and NCUA status on the NCUA's website.

Credit unions versus banks

Credit unions are member-owned financial institutions, while banks are shareholder-owned. This structure means credit unions often pay higher rates and charge lower fees because profits go back to members rather than shareholders. However, credit unions typically serve a specific group—employees of a certain company, members of a profession, people who live in a certain area, or people who work for a specific employer.

If you are may be able to access to join a credit union, compare its rates to online banks before deciding. Some credit unions pay rates as high as online banks; others pay less. The advantage of a credit union is that you may have access to a branch network through shared branching, which lets you use ATMs and deposit cash at partner credit unions nationwide. The disadvantage is that credit union websites and apps are often less polished than online bank apps, and customer service hours may be limited.

What happens to rates when the Federal Reserve changes policy

Banks set their savings rates based partly on the Federal Reserve's benchmark interest rate, called the federal funds rate. When the Fed raises rates, banks usually raise savings rates within days or weeks. When the Fed cuts rates, banks cut savings rates more slowly—sometimes taking months. This means if you lock in a high rate now and the Fed cuts rates later, your rate will eventually drop, but you will keep the higher rate for a while before the bank adjusts it downward.

The Fed does not set savings rates directly; it sets the rate that banks charge each other to borrow overnight. Banks then use that benchmark to decide what to pay depositors and charge borrowers. If you want to know whether rates are likely to go up or down, watch announcements from the Federal Reserve. The Fed meets eight times a year and announces rate decisions on scheduled dates. Financial news sites like CNBC, Reuters, and the Wall Street Journal cover these announcements.

Certificates of Deposit (CDs) versus savings accounts

If you have money you will not need for several months or years, a CD often pays a higher rate than a savings account. A CD is an agreement to leave your money in the bank for a set period—usually three months to five years. In exchange, the bank pays you a fixed rate that does not change, even if the Fed cuts rates. If you withdraw the money early, you pay a penalty, usually equal to a few months of interest.

For example, a high-yield savings account might pay 4.8% APY right now, but you can withdraw money anytime. A one-year CD at the same bank might pay 5.1% APY, but if you need the money after six months, you lose three months of interest. Compare the CD rate to the savings rate and decide whether the extra 0.3% is worth locking up your money. If you think you might need the cash, a savings account is safer. If you know you will not touch the money for a year, a CD usually makes sense.

Why your bank's rate matters less than you think

The difference between a 4.5% rate and a 5.3% rate sounds small, but it adds up. On $10,000, the difference is about $80 per year. On $100,000, it is about $800 per year. If you have a large balance and plan to keep it in savings for years, moving to a higher-rate bank is worth the effort. If you have $5,000 and plan to use it in six months, the difference is about $40—which may not justify the hassle of opening a new account and transferring money.

Also consider how often you need to access your money. If you make frequent transfers or deposits, an online bank with a clunky app or slow transfers may frustrate you. If you need to deposit cash regularly, an online bank will not work—you will need a bank with branches or a credit union with shared branching. The highest rate in the world is not worth it if you cannot actually use the account the way you need to.

Frequently Asked Questions

Is my money safe in an online bank?

Yes, as long as the bank is FDIC-insured. FDIC insurance protects up to $250,000 per account type per bank, regardless of whether the bank has physical branches. You can verify FDIC insurance on the FDIC's BankFind tool. Online banks are regulated by the same federal agencies as traditional banks and must meet the same safety standards.

Can I move money between banks without losing interest?

Yes. When you transfer money from one bank to another, you do not lose the interest you have already earned. The interest stops accruing at the old bank on the day the money leaves and starts accruing at the new bank on the day it arrives. There is usually a one to three day delay for transfers to clear, during which your money earns no interest at either bank.

What if a bank lowers its rate after I deposit money?

Banks can lower rates anytime, and they do not have to give you advance notice. If a bank drops its rate below what you can get elsewhere, you can withdraw your money and move it to a higher-rate bank. There is no penalty for moving money between savings accounts. The only penalty applies to CDs if you withdraw before the term ends.

Do I need a minimum balance to get the highest rate?

It depends on the bank. Some banks offer the same rate regardless of balance. Others offer a higher rate only if you maintain a minimum deposit, often $25,000 or more. Check the bank's terms before opening an account. If you have less than the minimum, look for a bank that does not require one.

Should I split my money across multiple banks?

If you have more than $250,000 in savings, splitting it across multiple FDIC-insured banks protects all of it under FDIC insurance. If you have less than $250,000, you only need one bank. Some people split money across banks to chase the highest rates, but the extra effort usually is not worth the small gain unless your balance is very large.