Banks and credit unions offer the highest rates right now

High-yield savings accounts pay between 4% and 5.35% annual interest as of early 2025, depending on the bank and current market conditions. You'll find them at three types of institutions: online banks (which have the lowest overhead and often pay the most), traditional banks with online divisions, and credit unions. The rate you see advertised is what new deposits earn immediately—no waiting period, no tiered structure that requires a minimum balance to unlock the rate.

Online banks consistently offer the highest rates because they don't maintain physical branches. Banks like Marcus, Ally, American Express Personal Savings, and Wealthfront Cash Account advertise rates above 4.5%. Traditional banks like Chase, Bank of America, and Wells Fargo offer high-yield accounts too, but their rates typically sit between 4.0% and 4.5%. Credit unions vary widely—some offer 4.5% or higher on savings, while others offer much less. The difference matters: on $10,000, the gap between 4.0% and 5.0% is $100 per year.

Key Takeaways

  • Online banks pay the highest rates, usually between 4.5% and 5.35%, because they have no branch costs to cover.
  • The rate advertised is the rate your money earns from day one—there are no tiers or minimum balances that unlock better rates at most institutions.
  • You can compare rates across dozens of banks in minutes using rate aggregator sites like Bankrate, DepositAccounts, or the banks' own websites.
  • FDIC insurance protects up to $250,000 per depositor per bank, so splitting money across multiple banks lets you insure more than $250,000 total.
  • Rates change weekly or monthly as the Federal Reserve adjusts its benchmark rate, so the highest-paying account today may not be the highest next month.

How to compare rates across banks quickly

Rate aggregator websites let you see dozens of current rates side by side without visiting each bank individually. Bankrate, DepositAccounts, and DepositAccounts.com all update rates daily and let you filter by account type, minimum deposit, and FDIC insurance status. You can also visit individual bank websites directly—most online banks display their current rate prominently on the homepage.

When you compare, look at three things: the annual percentage yield (APY), any minimum deposit requirement, and whether the bank is FDIC-insured. The APY is the rate that matters—it includes compounding. A $10,000 deposit at 5.0% APY earns about $500 in the first year if interest compounds daily. Most online banks have no minimum deposit or a minimum of $1 to $25. FDIC insurance is standard at banks chartered in the United States; credit unions carry NCUA insurance, which works the same way.

Online banks versus traditional banks with online accounts

Online banks (Marcus, Ally, American Express, Wealthfront) operate only through websites and apps—no physical locations. They pass the savings from not running branches directly to depositors through higher interest rates. Opening an account takes 10 to 15 minutes online, and you can fund it by transferring money from another bank account or by mailing a check.

Traditional banks (Chase, Bank of America, Wells Fargo, Citibank) offer high-yield savings accounts through their websites, but their rates are typically 0.5% to 1.0% lower than online-only banks. The trade-off is convenience: if you already have a checking account at a traditional bank, you can open a linked savings account in minutes without setting up a new login. You also have access to physical branches and ATMs if you need cash. For most people saving money they won't touch for months or years, the higher rate at an online bank outweighs the convenience of a branch.

Credit unions and their high-yield options

Credit unions are member-owned nonprofits, and some offer savings rates competitive with online banks. Navy Federal Credit Union, Pentagon Federal Credit Union, and Connexus Credit Union have offered rates above 4.5% in recent years. However, credit union rates vary dramatically by institution and by membership category—some credit unions pay 0.5% or less on savings.

To open a credit union account, you must meet their membership requirements, which often tie to your employer, location, or membership in an organization. Membership is usually free or costs $5 to $25 one time. If you already belong to a credit union, call or visit their website to ask about their current savings rate. If you don't belong to one, you can search for credit unions you're may be able to access to join using the CO-OP or Allpoint locator tools, or ask whether your employer, school, or professional association sponsors one.

What FDIC and NCUA insurance means for your money

FDIC insurance protects deposits at banks up to $250,000 per depositor per institution. If you have $250,000 in a savings account at Bank A and $250,000 at Bank B, both are fully insured. If you have $300,000 at one bank, only $250,000 is protected. NCUA insurance works identically for credit unions—$250,000 per member per institution.

This matters if you're saving a large amount. You can split money across multiple banks to insure more than $250,000. For example, $250,000 at Marcus plus $250,000 at Ally plus $250,000 at American Express means $750,000 total, all insured. You can check whether a bank is FDIC-insured by searching the FDIC's Bank Find tool on their website. All major online banks and traditional banks are FDIC-insured; verify before opening an account at a smaller or newer institution.

How rates change and when to move your money

High-yield savings rates move with the Federal Reserve's benchmark interest rate. When the Fed raises rates, banks raise savings rates within weeks. When the Fed cuts rates, banks cut savings rates more slowly—sometimes weeks or months later. This means the bank paying the highest rate today may not be the highest next month.

You don't have to stay with one bank forever. If your current bank's rate drops below competitors' rates by 0.5% or more, you can transfer your money to a higher-paying bank. Transfers between banks take 3 to 5 business days. Some people move money every few months to chase the highest rate; others pick a reputable bank and stay put. Both approaches work. The important thing is to keep your savings in a high-yield account rather than a regular savings account, which typically pays 0.01% to 0.5%.

Frequently Asked Questions

Can I lose money in a high-yield savings account?

No. Your principal is protected by FDIC or NCUA insurance, and interest only goes up or down—it never turns negative. The only risk is that rates fall, so your money earns less interest than it did before. That's a risk of lower earnings, not a risk of losing what you deposited.

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

Opening an account online takes 10 to 20 minutes. Funding it takes 1 to 5 business days if you transfer from another bank, or 7 to 14 days if you mail a check. Interest starts accruing once the money lands in the account. Some banks credit interest daily; others credit it monthly. Either way, you earn the full APY regardless of how often interest is credited.

What's the catch with high-yield savings accounts?

There is no catch. High-yield accounts are real products from real banks. The reason rates are high is that online banks have low costs, and rates move with the Federal Reserve's benchmark. The trade-off is that you can't access your money instantly—transfers take 3 to 5 business days. If you need cash today, you'd use a checking account instead.

Do I need a minimum balance to earn the advertised rate?

Most online banks have no minimum balance requirement. A few require $1 to $25 to open an account, but once it's open, you earn the full rate on any balance. Traditional banks sometimes require $500 or $1,000 to open a high-yield account. Check the bank's website before opening to confirm.

Can I withdraw money whenever I want?

Yes, but withdrawals take 3 to 5 business days to reach your other bank account. Some banks let you withdraw to a linked checking account faster. If you need cash the same day, you'd use a checking account or ATM instead. High-yield savings accounts are designed for money you're saving and won't need immediately.