Banks offering high yield savings accounts today

High yield savings accounts are offered by online banks, credit unions, and a handful of traditional banks. The banks paying the highest rates right now include Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, Discover Bank, and Capital One 360. Rates change weekly, sometimes daily, so the bank paying the most this week may not be the one paying the most next week. You can compare current rates on sites like Bankrate, DepositAccounts, or the individual bank websites themselves—those sites update rates in real time.

Online banks tend to offer higher rates than brick-and-mortar banks because they have lower overhead costs. A traditional bank with physical branches in your city will almost always pay less than an online-only bank. Credit unions sometimes offer competitive rates, though you have to be a member, which usually means living or working in a specific area or belonging to a particular employer or organization.

The rate you receive depends on the bank's current offer and sometimes on how much you deposit. Some banks offer one rate for all balances; others offer a higher rate if you maintain a minimum balance, often $25,000 or more. Read the terms carefully before opening an account, because the advertised rate may only apply above that threshold.

Key Takeaways

  • Online banks consistently offer higher rates than traditional banks because they do not operate physical branches.
  • The highest-paying banks change week to week, so compare rates directly on bank websites or rate-tracking sites before opening an account.
  • Some banks pay different rates depending on your balance size, so check whether the advertised rate applies to your deposit amount.
  • Credit unions may offer competitive rates, but membership requirements vary by location and employer.
  • All deposits in FDIC-insured accounts are protected up to $250,000 per depositor per bank, regardless of the rate offered.

Online banks versus traditional banks

Online banks have no physical locations, which means they spend far less on rent, staff, and equipment. That cost savings gets passed to depositors as higher interest rates. An online bank paying 4.5% APY on a high yield savings account is common; a traditional bank paying more than 0.5% is rare. The trade-off is that you cannot walk into a branch to deposit cash or speak to someone in person—everything happens through an app or website.

Traditional banks offer convenience and familiarity. You can deposit checks and cash at a branch, speak to a human, and often get a debit card tied to your savings account. But that convenience costs you in interest. If you are comfortable managing money online and do not need to deposit cash regularly, an online bank will earn you significantly more.

Some people keep accounts at both: a high yield savings account at an online bank for money they want to grow, and a checking account at a traditional bank for daily spending and cash deposits. This approach lets you earn a competitive rate while keeping the services you use most often.

What to check before opening an account

Before you open a high yield savings account, verify that the bank is FDIC-insured. This means your deposits are protected up to $250,000 if the bank fails. Every bank listed on major rate-tracking sites is FDIC-insured, but it takes 30 seconds to confirm on the FDIC website. Search for the bank name in their Bank Find tool, and you will see the exact coverage limits.

Check the minimum deposit requirement. Some banks require $0 to open; others require $25,000 or more. If you do not have that amount, you will not be able to open the account or will receive a lower rate. Read the fine print on the bank's website, not just the advertised rate on a comparison site.

Look at how the bank handles withdrawals. Federal rules used to limit savings account withdrawals to six per month, but that rule was suspended in 2020. Most banks now allow unlimited withdrawals, but some still impose limits or fees. If you think you will need to move money in and out frequently, confirm the withdrawal policy first.

Consider how you will deposit money. If you need to deposit cash, you will need a bank that has ATMs in your area or a partnership with other banks' ATMs. If you only deposit checks and transfers, this matters less. Online banks typically partner with ATM networks like Allpoint or MoneyPass to give customers access to thousands of ATMs nationwide.

How rates change and what that means for you

High yield savings rates move with the federal funds rate, which the Federal Reserve adjusts based on economic conditions. When the Fed raises rates, banks raise their savings rates. When the Fed cuts rates, banks cut their savings rates. This can happen within days or weeks. A rate that is 4.5% today might be 4.25% in three months if the Fed cuts rates.

Once you open an account, your rate is not locked in. The bank can lower your rate at any time, though they must notify you before the change takes effect. You are not obligated to stay with a bank if the rate drops. You can move your money to a different bank offering a higher rate. There is no penalty for closing a savings account and moving your balance elsewhere.

This means you should check rates periodically—monthly or quarterly—and be willing to move your money if another bank is paying significantly more. Some people move their savings between banks several times a year to chase the highest rate. Others pick a bank they trust and stay put even if the rate drops slightly. Both approaches work; it depends on how much time you want to spend managing the account.

Credit unions and their rate offerings

Credit unions are member-owned financial institutions that sometimes offer high yield savings rates competitive with online banks. However, you must be a member to open an account, and membership rules vary widely. Some credit unions are open to anyone who lives in a specific county. Others are only open to employees of a particular company or members of a specific organization like a union or professional association.

To find a credit union you can join, use the CO-OP Network locator or search by employer or organization name on the Credit Union National Association website. If you find one you can join, compare their rates to online banks before opening an account. Credit union rates are not always higher than online banks, and some credit unions pay very low rates on savings.

Credit unions are insured by the National Credit Union Administration (NCUA), which provides the same $250,000 protection as FDIC insurance. The coverage works the same way, so you have the same safety whether you bank at a credit union or an online bank.

Moving money between banks

If you decide to move your savings to a different bank for a higher rate, the process is straightforward. You open a new account at the new bank, then transfer your balance from the old account. Most banks can initiate an ACH transfer, which moves money between accounts at different banks in one to three business days. You can also withdraw the money and deposit it at the new bank, though that takes longer and requires you to handle the cash or check yourself.

When you transfer money out, the old bank will not charge you a fee. When you receive money at the new bank, they will not charge you a fee. ACH transfers between banks are free. Once the transfer is complete, you can close the old account. Some banks offer a small bonus—$50 to $200—for opening a new account and depositing a certain amount, so it can be worth checking whether the new bank has a current promotion.

Keep in mind that closing an account does not hurt your credit score. Savings accounts do not appear on your credit report, so opening and closing them has no impact on your creditworthiness.

Frequently Asked Questions

Can I lose money in a high yield savings account?

No. High yield savings accounts are insured by the FDIC up to $250,000, and the interest rate is may provide by the bank. Your balance will never go down unless you withdraw money. The rate can go down, which means you earn less interest going forward, but your principal is always safe.

What is the difference between a high yield savings account and a money market account?

Both earn interest and are FDIC-insured. Money market accounts sometimes offer check-writing or debit card access, while high yield savings accounts typically do not. Money market accounts may also have higher minimum balances. For most people, a high yield savings account is simpler and offers comparable rates.

Do I have to keep a minimum balance to earn the advertised rate?

It depends on the bank. Some banks pay the advertised rate on all balances, no matter how small. Others pay the advertised rate only if you maintain a specific minimum, often $25,000. Always check the bank's terms before opening an account to see whether your deposit amount qualifies for the stated rate.

How often do banks change their high yield savings rates?

Banks can change rates at any time, though most make changes weekly or when the Federal Reserve adjusts its rates. You will receive notice before a rate decrease takes effect. If the rate drops significantly, you can move your money to a different bank without penalty.

Is my money safe if I move it between banks?

Yes. ACH transfers between FDIC-insured banks are safe and free. Your money is protected during the transfer, which typically takes one to three business days. Once the transfer is complete, your balance is insured at the new bank up to $250,000.