Banks and credit unions that offer high yield savings accounts

High yield savings accounts live at online banks, some traditional banks with online divisions, and credit unions. The accounts that pay the highest rates are almost always at banks with no physical branches—companies like Marcus, Ally, American Express Personal Savings, and Discover Bank. These banks have lower overhead costs and pass the difference to depositors as higher rates.

Traditional banks (Chase, Bank of America, Wells Fargo) offer savings accounts, but their rates are typically much lower than online alternatives. Some have created online divisions specifically to compete: Bank of America has Merrill Wealth, and Citibank offers online savings through Citi. Credit unions also offer savings accounts, and some have competitive rates, but you must be a member to open an account—membership usually requires living or working in a specific area or belonging to a particular employer or organization.

The rate each bank pays changes weekly or daily, so the highest-paying option today may not be the highest next month. Checking current rates at multiple banks before opening an account takes 10 minutes and can mean hundreds of dollars in difference over a year.

Key Takeaways

  • Online banks without physical branches typically pay the highest rates on savings accounts because they have lower operating costs.
  • Traditional banks and their online divisions usually pay lower rates than pure online banks, even when they offer online savings products.
  • Credit unions may offer competitive rates, but membership requirements vary by location, employer, or organization affiliation.
  • Rates change frequently, so comparing current rates across at least three banks before opening an account can save you significant money.
  • All deposits at FDIC-insured banks and NCUA-insured credit unions are protected up to $250,000 per depositor, per institution.

How to compare rates across banks

Start by visiting the websites of three to five banks and looking for their current Annual Percentage Yield (APY) on savings accounts. Write down the rate, the minimum deposit required (if any), and whether there are monthly fees. Most online banks have no minimum deposit and no monthly maintenance fees, but confirm this before opening.

Websites like Bankrate, DepositAccounts, and DepositAccounts.com aggregate current rates from many banks in one place, which saves time. These sites update rates daily and let you sort by APY, minimum deposit, or bank type. You can also call a bank's customer service line to confirm the rate before you open an account—rates on websites can lag by a few hours.

Pay attention to whether the rate is promotional or permanent. Some banks offer a higher rate for the first few months, then drop it. Read the account terms or call and ask directly: "Is this rate may provide for how long?" If a rate seems unusually high, it is often a limited-time offer.

Opening an account online

Most online banks let you open an account in 10 to 15 minutes from your phone or computer. You will need a valid government ID (driver's license or passport), your Social Security number, and proof of your current address (a recent utility bill, lease, or bank statement). Have these documents ready before you start.

The bank will ask for your name, date of birth, address, and employment information. They will verify your identity by checking your credit report (a soft pull that does not affect your credit score) and may ask you to confirm recent transactions on another account you own. After verification, you can usually link a checking account from another bank and transfer money the same day or within one business day.

Some banks offer a debit card for the savings account, though most do not. If you want to withdraw cash without a card, you can transfer money to your checking account and use that card, or visit a partner ATM network (many online banks partner with Allpoint or MoneyPass for fee-free withdrawals).

What to watch for when choosing a bank

FDIC insurance protects your money up to $250,000 per depositor, per bank. If a bank fails, the FDIC reimburses you. Confirm the bank is FDIC-insured by checking the FDIC's BankFind tool on their website or asking the bank directly. Credit unions are insured by the NCUA (National Credit Union Administration) up to the same $250,000 limit.

Check whether the bank charges a monthly maintenance fee, a fee for transfers out of the account, or a fee if your balance drops below a minimum. Most online banks charge none of these, but some traditional banks do. A $5 monthly fee erases years of higher interest earnings on a small balance.

Look at the bank's customer service options. Can you reach someone by phone, email, or chat? Online banks vary widely—some have 24/7 phone support, others only offer email. If you think you will need to call with questions, test their phone line before you open an account.

Moving money in and out

Most online banks let you link a checking account from another bank and transfer money electronically. ACH transfers (Automated Clearing House) are free and take one to three business days. You can set up recurring transfers to move money automatically each payday, which helps you save without thinking about it.

Some banks let you deposit checks by taking a photo with your phone (mobile check deposit). Others require you to mail checks or transfer money from another account. Ask about this before opening if you receive paper checks regularly.

Withdrawals work the same way: transfer money back to your checking account (free, one to three days) or use an ATM if the bank offers one. Some online banks charge a fee for out-of-network ATM use, so confirm whether they reimburse those fees or have a partner network you can use for free.

Rates and how they change

The rate a bank pays on savings accounts follows the Federal Reserve's interest rate decisions. When the Fed raises rates, banks typically raise their savings rates within days or weeks. When the Fed cuts rates, banks cut their savings rates, though sometimes more slowly. The rate you see today is not locked in—it can change at any time, and the bank will notify you by email or through your account dashboard.

A rate that is high today may be average in three months if other banks raise their rates higher. This does not mean you should switch banks constantly—moving money takes time and effort. But if your bank's rate falls significantly below the market average (more than 0.5% lower), it may be worth moving to a higher-paying bank. Calculate whether the difference is worth the effort based on your balance and how long you plan to keep the money there.

Frequently Asked Questions

Can I have high yield savings accounts at multiple banks?

Yes. You can open accounts at as many banks as you want, and each account is insured separately up to $250,000 by the FDIC. Some people open accounts at two or three banks to spread their savings and take advantage of different rates or features. Just keep track of which bank holds which money so you do not lose track of your balance.

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

A money market account is a hybrid between a savings account and a checking account. It usually pays a similar or slightly higher rate than a savings account, but it comes with a debit card or checkbook so you can withdraw money more easily. The tradeoff is that some money market accounts have higher minimum deposits or monthly fees. Compare the rate, fees, and withdrawal options before choosing between the two.

Is my money safe in an online bank?

Yes, if the bank is FDIC-insured. Your deposits are protected up to $250,000 even if the bank fails. Online banks use the same encryption and security standards as traditional banks. Confirm the bank is FDIC-insured before opening an account by checking the FDIC's BankFind tool.

How long does it take to open an account and start earning interest?

You can open an account in 10 to 15 minutes online. Interest starts accruing as soon as money hits your account, usually the same day or the next business day. Interest is typically paid monthly, so you will see your first interest deposit 30 to 45 days after you open the account, depending on when in the month you opened it.

What happens if I need to withdraw money before a certain time?

High yield savings accounts have no withdrawal penalties or lock-in periods. You can withdraw money anytime without losing interest or paying a fee. The only limit is that federal law allows banks to require advance notice before withdrawals, but most banks waive this requirement in practice. Money transferred to another account takes one to three business days to arrive.