Banks and credit unions that offer high yield savings accounts

High yield savings accounts are offered by online banks, traditional banks with online divisions, and credit unions. Online banks typically pay the highest rates because they have lower overhead costs than brick-and-mortar branches. Names you will see repeatedly: Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, Discover Bank, and Capital One 360. Traditional banks like Chase, Bank of America, and Wells Fargo also offer high yield savings products, though their rates are usually lower than online-only competitors.

Credit unions can be competitive too, especially if you are a member of a large one. Navy Federal Credit Union, Connexus Credit Union, and Pentagon Federal Credit Union are known for strong rates on savings accounts. You must be a member to open an account, which sometimes requires living in a certain area, working for a specific employer, or joining an affinity group. Check whether you already have membership through your employer, military service, or family.

The rate you receive depends on the bank's current offer and the size of your deposit. Banks change rates frequently—sometimes weekly—so the highest rate today may not be the highest rate next month. Most online banks have no minimum deposit requirement, though a few ask for $25 or $100 to open. Rates vary by institution and change based on Federal Reserve policy, so comparing three to five options before opening is worth the time.

Key Takeaways

  • Online banks generally pay higher rates than traditional banks because they have fewer physical locations and lower costs to operate.
  • You can open a high yield savings account in minutes online with most banks, and many require no minimum deposit.
  • Rates change frequently, so the best rate today may shift within weeks—check current offers from at least three banks before deciding.
  • Credit unions can offer competitive rates if you are a member, but membership rules vary by institution.
  • Your money is insured up to $250,000 per account at FDIC-insured banks or NCUA-insured credit unions, so the bank's size does not affect safety.

How to compare rates across banks

Start by visiting the websites of three to five banks directly. Do not rely on rate comparison sites alone, because they update slowly and sometimes show outdated figures. Go to the savings account page on each bank's website and look for the current Annual Percentage Yield (APY). The APY is the only number that matters for comparison—it already includes compounding, so you do not have to do math yourself.

Write down the APY, any minimum balance requirement, and whether the bank charges monthly fees. Most online banks charge no monthly maintenance fee, but some traditional banks do. A $10 monthly fee erases the benefit of a slightly higher rate, so factor that in. Also note whether the rate is promotional (lasting a few months) or standard (lasting indefinitely). Promotional rates are real money, but they drop after the promotion ends.

Once you have narrowed it to two or three banks, read the account terms on each website. Look for details about how often interest compounds (daily is standard), whether you can make unlimited withdrawals, and how long transfers take. Most high yield savings accounts allow six withdrawals per month without penalty, though this rule has loosened at many banks in recent years.

Opening an account online

The process takes 10 to 20 minutes and requires a computer or phone, your Social Security number, a government-issued ID, and proof of address. Have a recent utility bill, lease, or mortgage statement ready. You will also need a bank account to link for transfers—this can be a checking account at another bank or a debit card.

Start by clicking "Open an Account" on the bank's website. You will answer questions about your identity, income, and employment. The bank verifies your information against databases in real time. If everything matches, you get an account number immediately and can begin transferring money the same day. If there is a mismatch, the bank may ask you to upload a photo of your ID or call you to confirm details.

After your account opens, link it to your existing checking account or debit card. This takes one to two business days for the bank to confirm the connection. Once confirmed, you can transfer money in and out. Most banks process transfers within one business day during the week, though some take longer on weekends or holidays.

Understanding FDIC and NCUA insurance

Your money in a high yield savings account is protected by FDIC insurance if the bank is FDIC-insured, or by NCUA insurance if it is a credit union. Both may provide your deposits up to $250,000 per account, per institution. This means if the bank fails, the government reimburses you. The size or reputation of the bank does not matter—a small online bank's deposits are just as safe as a large national bank's.

Check whether a bank is FDIC-insured by searching its name on the FDIC's website (fdic.gov). For credit unions, search the NCUA's website (ncua.gov). If a bank is not listed, do not open an account there. The insurance applies to each account separately, so if you have a savings account and a checking account at the same bank, you are covered up to $250,000 in each one.

If you have more than $250,000 to save, you can split it across multiple banks to keep all of it insured. For example, $250,000 at Bank A and $250,000 at Bank B means both amounts are fully protected. Some people also open accounts in different names (like a joint account with a spouse) at the same bank, because each account type is insured separately.

Transfers and access to your money

Most high yield savings accounts let you move money to and from a linked checking account at another bank. The transfer usually takes one to two business days. Some banks offer faster transfers for an extra fee, but this is rarely worth it for a savings account. If you need cash immediately, you can withdraw from an ATM if the bank offers ATM access, though many online banks do not have their own ATMs.

Check the bank's withdrawal rules before opening. Many banks allow unlimited transfers now, but some still limit you to six per month. If you exceed the limit, the bank may charge a fee or close your account. For a true savings account (not a checking account), you should not need frequent withdrawals anyway—the point is to keep the money separate and earning interest.

Some banks offer a debit card linked to your savings account, which lets you spend directly from savings. This defeats the purpose of keeping savings separate, so most people avoid it. Instead, transfer money to checking when you need to spend it.

Promotional rates and rate changes

Many banks offer a higher rate for the first three to six months, then drop to a lower standard rate. Read the terms carefully to see when the promotion ends and what the rate will be after. A 5.00% promotional rate that drops to 3.50% after six months is still worth opening if you plan to keep the account long-term, but know what you are signing up for.

Banks can change their standard rates at any time without notice. When the Federal Reserve raises or lowers interest rates, banks usually adjust their savings rates within days or weeks. This means the rate you lock in today may be higher or lower than the rate next month. You are not locked into a rate—if another bank offers more, you can open a new account there and transfer your money. There is no penalty for moving savings between banks.

Some people keep accounts at two or three banks and move money to whichever one is paying the highest rate. This takes a few minutes every few months and can add up to real money over time. Others pick one bank and stay put, accepting that they may not always have the absolute highest rate. Both approaches work—it depends on how much time you want to spend managing your savings.

Frequently Asked Questions

Can I open a high yield savings account if I have bad credit?

Yes. Banks do not check your credit score for savings accounts. They may check ChexSystems, a banking history database, to see if you have had problems with previous accounts (like overdrafts or fraud). If you have a clean history, you will be approved. If you have been flagged in ChexSystems, some banks will still open an account for you, but others will decline.

What happens to my money if the bank goes out of business?

The FDIC or NCUA takes over and pays you back up to $250,000. This process usually takes a few weeks. Your money is safe even if the bank fails, as long as it is FDIC or NCUA insured. This has happened to hundreds of banks over the years, and depositors have always been made whole.

Can I have multiple high yield savings accounts?

Yes. You can open accounts at as many banks as you want. Each account is insured separately up to $250,000, so having multiple accounts lets you save more money with full insurance coverage. Some people use multiple accounts to track different savings goals (vacation, emergency fund, down payment) or to chase the highest rates.

Do I have to keep a minimum balance?

Most online banks have no minimum balance requirement. A few ask for $25 or $100 to open, but you can withdraw it immediately after. Check the specific bank's terms before opening. Even if there is a minimum, it is usually low enough that it does not matter for most people.

How often does interest compound?

Most high yield savings accounts compound interest daily, which means you earn interest on your interest every single day. This is the best option for you. Some banks compound monthly or quarterly, which earns you slightly less. The APY already accounts for compounding, so you do not have to calculate it yourself—just compare the APY numbers.