Best High-Yield Online Savings Accounts of December 2024
Compared to conventional savings accounts, high-yield savings accounts can help you increase your money more quickly. A high-yield savings account is a good choice if you wish to save money for other financial objectives or to start building an emergency fund.
Best High-Yield Savings Accounts
To identify some of the top high-yield savings accounts available, we analyzed 73 online savings accounts offered by 53 nationally accessible banks and credit unions.
Best Online High-Interest Savings Rates
Our ranking of the top accounts took into account several factors, not just the annual percentage yield (APY). This is an overview of our best accounts, arranged by the highest available APY.
- Milli Savings Account: 5.50% APY
- UFB Secure Savings: Up to 5.25% APY
- Bread Savings High-Yield Savings Account: 5.15% APY
- Bask Interest Savings Account: 5.10% APY
- BMO Alto Online Savings Account: 5.10% APY
- M1 High-Yield Savings Account: Up to 5.00% APY
- Synchrony Bank High Yield Savings: 4.75% APY
- SoFi Checking and Savings Account: Up to 4.60% APY
- Citizens Access® Savings: 4.50% APY
What is a high-yield savings account?
One kind of federally insured savings product that yields rates significantly higher than the national average is the high-yield savings account. They may make about 5%. In contrast, the average rate across the country is 0.46%.
Why choose a high-yield savings account?
Your balance can increase more quickly in a high-yield savings account than it would in an average savings account over time. These accounts are also referred to as high-interest savings accounts. You are not putting any more effort into doing this. In an account with a higher rate, your money is working harder for you.
What is the difference between a high-yield savings account and a traditional savings account?
Compared to a standard savings account, a high-yield savings account yields a substantially greater return. High-yield savings accounts give much higher interest rates than ordinary savings accounts, which can have rates as low as 0.01% APY, especially when they are offered by big national banks. The finest high-yield accounts currently provide rates that reach about 5% APY.
Alternatives to high-yield savings accounts
High-yield savings account vs money market account
Money market accounts (MMAs) and high-yield savings accounts (HYPAs) are two different kinds of savings accounts; MMAs usually allow you to make a few purchases each month and come with debit cards and checks. You can typically link both kinds of accounts to other deposit accounts—like bank accounts—to conduct electronic withdrawals and deposits. However, money market accounts provide the added advantage of debit cards or cheques, making it simpler to access your money. This could be useful if you require quick access to your money. However, some MMAs have large minimum initial deposits and monthly costs as well.
High-yield savings account vs certificate of deposit (CD)
Both certificates of deposit and high-yield savings accounts are federally guaranteed deposit accounts; but, because CDs lock in your money for a predetermined amount of time, they typically carry higher rates. Money that can be saved for the full CD term—which might be anywhere from a few months to five years or longer—is best suited for CDs. Consider creating a CD if your short-term savings aim is to buy something in a few years. Though there can be a six-per-month cap on some withdrawal categories, money in high-yield savings accounts can typically be taken out whenever needed. A high-yield savings account is a better choice for an emergency fund than a certificate of deposit (CD).
High-yield savings account vs checking account
High-yield savings accounts and checking accounts are different in that the former is used for account balance development, while the latter is utilized for regular spending. A high-yield savings account usually pays more interest than a checking account, even though it could have withdrawal restrictions of up to six per month for specific categories. However, some checking accounts do pay interest or give cash-back rewards.
How much interest will I get on $10,000 after a year in a high-interest savings account?
Your balance will increase more quickly without any extra work on your behalf if your money is in an account that earns a high-interest rate. After a year, a $10,000 savings deposit with a 5% APY would yield slightly more than $500. Although the profits won’t make you wealthy, they are still significantly more than an account generating roughly $40 with an APY of 0.40%.
How do I choose the best high-interest savings accounts?
Seek for accounts with cheap service fees and large interest rates. Make sure there are no monthly fees that need to be paid. While some institutions levy monthly fees, others do so but will waive them provided you maintain a minimum amount.
Be prepared to look past the more recognizable and bigger banks. Good rates and low deposit requirements can be found at many smaller institutions, including internet banks and apps.
High-yield savings accounts: Pros and cons
Here’s a comparison of the advantages and disadvantages of standard high-yield savings accounts with alternative approaches to money growth.
High-yield savings account pros:
-
yields greater interest rates than comparable savings plans.
has government insurance because it is a bank account (unlike investments).
may usually be accessed online, allowing you to stay at home.
High-yield savings account cons:
occasionally has a larger minimum initial balance than standard savings accounts.
Although having an online opening is a benefit, some are exclusively available online, eliminating the possibility of in-person customer support.
The highest APY savings accounts are easy to access
You can safely access your account day or night with online banking. While charging lower fees than traditional banks, online banks, credit unions, and nonbank providers provide some of the best savings rates available. Additionally, they frequently provide useful mobile apps and websites that enable users to pay bills and deposit checks.
How to open an account with the best interest rates
You can open an account online or in person, depending on the kind of financial organization. Your Social Security number, contact details, and at least one form of identification—such as a passport or driver’s license—will be required. (For a joint account, these details and identification are required for each person wishing to access the account.) It’s usually necessary for you to fund the new account immediately. You can accomplish it by making a wire transfer or depositing cash or checks.
What to do if you can’t open a high-interest savings account
Sometimes, the application you submit to open an account is rejected. Most likely, there were problems with your prior bank history.
Financial organizations can utilize a negative file on ChexSystems, a consumer reporting agency, to assess a potential customer’s banking history if they have unpaid bank fees and failed checks.
For clients with a ChexSystems file, there are possibilities, such as opening different accounts. See our overview on what to do if you have a ChexSystems record for more details.
Are high-yield savings accounts safe?
To put it succinctly, sure. Federal insurance covers high-yield savings accounts at banks and credit unions up to $250,000 per depositor, and many nonbank providers collaborate with banks to provide insurance. The National Credit Union Administration insures credit union accounts, whereas the Federal Deposit Insurance Corp. insures bank accounts. This implies that the government guarantees the safety and accessibility of your funds even if the financial institution collapses. To find out more, see NerdWallet’s overview of FDIC insurance.
What’s the difference when NerdWallet notes “Member FDIC” vs. “funds insured by FDIC” on savings accounts?
The term “Member FDIC” is used to designate a savings account provided by a bank since the account is federally insured and the bank is a member of the Federal Deposit Insurance Corp. When a financial technology business, rather than a bank, offers a savings account, it usually collaborates with an FDIC-insured bank to retain the money so that deposits are protected. We indicate “funds insured by the FDIC” in those circumstances. We write “funds insured by the NCUA” because credit union savings accounts are federally insured by the National Credit Union Administration.
High-yield savings account terminology
A few key phrases related to savings are listed below.
Savings account:
An interest-bearing deposit account with a financial institution.
Money market account:
a kind of savings account where a high minimum deposit is required in exchange for frequently greater interest rates. (Consider $5,000 or above.)
Interest:
Over time, money is deposited into an account by a financial institution.
Compound interest:
The interest you receive on both your initial investment and the interest you continue to accrue is known as compound interest. When compound interest is paid on an account, the return is applied to the initial principle after each compounding period, which is usually done on a daily or monthly basis. Greater balances generate interest at each calculation and addition of interest to the account.
Annual percentage yield:
The amount of compound interest an account receives annually is known as the annual percentage yield, or APY. The computation relies on the interest rate of the account and the frequency of interest payments made during the year. The greatest annual percentage yield (APY) savings account increases more quickly than a lesser-yielding account.
Full list of editorial picks: best high-yield online savings accounts
themoneymail considers a number of factors, including as monthly fees, minimum balance requirements, APY, mobile app ratings, and customer support availability, when determining which high-yield online savings accounts are the best. To read a complete evaluation, click the name of the financial institution in the table below.
|
Financial Institution |
NerdWallet Overall Institution Rating |
APY |
Minimum balance to open |
|---|---|---|---|
|
Affirm, funds insured by FDIC. |
3.5. |
4.35%. |
No minimum to open account. |
|
Ally, Member FDIC. |
5.0. |
4.25%. |
No minimum to open account. |
|
American Express, Member FDIC. |
4.0. |
4.30% APY (annual percentage yield) as of 09/27/2023. |
Minimum to open = $0. |
|
Barclays, Member FDIC. |
4.0. |
4.35%. |
No minimum to open account. |
|
Bask Bank, Member FDIC. |
4.0. |
5.10%. |
No minimum to open account. |
|
BMO Alto, Member FDIC. |
4.5. |
5.10%. |
No minimum to open account. |
|
Bread Savings, funds insured by FDIC. |
4.5. |
5.15%. Bread Savings disclosure
|
$100 minimum to open account. |
|
Capital One 360, Member FDIC. |
4.5. |
4.35%. |
No minimum to open account. |
|
CIBC U.S., Member FDIC. |
3.5. |
5.01%. |
$1,000 minimum to open account. |
|
CIT Bank, Member FDIC. |
4.0. |
5.05%. |
$100 minimum to open account. |
|
Citibank, Member FDIC. |
4.0. |
4.45%. |
No minimum to open account. |
|
Citizens, Member FDIC. |
4.0. |
4.50%. |
$1 minimum to open account. |
|
ConnectOne Bank, Member FDIC. |
3.5. |
4.90%. |
$2,500 minimum to open account. |
|
Discover Bank, Member FDIC. |
4.5. |
4.35%. |
No minimum to open account. |
|
E*TRADE, Member FDIC. |
4.0. |
4.25%. |
No minimum to open account. |
|
EverBank (formerly TIAA Bank), Member FDIC. |
4.5. |
5.15%. |
No minimum to open account. |
|
First Foundation Bank, Member FDIC. |
3.5. |
5.00%. |
$1,000 minimum to open account. |
|
LendingClub, Member FDIC. |
4.5. |
4.65%. |
$100 minimum to open account. |
|
Live Oak Bank, Member FDIC. |
3.5. |
4.40%. |
No minimum to open account. |
|
Marcus by Goldman Sachs, Member FDIC. |
4.5. |
4.40%. |
No minimum to open account. |
|
Popular Direct, Member FDIC. |
4.0. |
5.40%. |
$100 minimum to open. |
|
Quontic Bank, Member FDIC. |
4.0. |
4.50%. |
$100 minimum to open account. |
|
Salem Five Direct, Member FDIC. |
4.0. |
5.01%. |
$10 minimum to open account. |
|
Sallie Mae Bank, Member FDIC. |
4.0. |
4.50%. |
No minimum to open account. |
|
SoFi, Member FDIC. |
5.0. |
4.60%. |
No minimum to open account. |
|
Synchrony Bank, Member FDIC. |
4.5. |
4.75%. |
No minimum to open account. |
|
TAB Bank, Member FDIC. |
4.5. |
5.27%. |
No minimum to open account. |
|
UFB Direct, Member FDIC. |
4.5. Editor’s note:
|
5.25%. |
No minimum to open account. |
|
Upgrade, funds insured by FDIC. |
4.5. |
5.07%. |
No minimum to open account. |
|
Varo, Member FDIC. |
4.5. |
3.00% (5.00% if certain requirements are met.) |
No minimum to open account. |
Historical savings rates
The savings rate movement observed by some financial institutions during the past few months is displayed in the table below. Two national banks and a few internet companies were our selections for comparison.
Note: Unless specified otherwise, rates are accessed at the start of each month. Rates are subject to change at any time.
|
December 2023 |
November 2023 |
October 2023 |
September 2023 |
August 2023 |
July 2023 |
June 2023 |
May 2023 |
April 2023 |
March 2023 |
February 2023 |
January 2023 |
December 2022 |
November 2022 |
October 2022 |
September 2022 |
August 2022 |
July 2022 |
June 2022 |
May 2022 |
|
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
|
Online institutions |
||||||||||||||||||||
|
Ally, Member FDIC. |
4.25% APY. |
4.25% APY. |
4.25% APY. |
4.25% APY. |
4.25% APY. |
4.00% APY. |
3.85% APY. |
3.75% APY. |
3.75% APY. |
3.40% APY. |
3.40% APY. |
3.30% APY. |
3.30% APY. |
3.00% APY. |
2.35% APY. |
1.85% APY. |
1.85% APY. |
1.25% APY. |
1.00% APY. |
0.60% APY. |
|
CIT Bank, Member FDIC. |
5.05% APY. |
5.05% APY. |
5.05% APY. |
5.05% APY. |
5.05% APY. |
4.95% APY. |
4.85% APY. |
4.75% APY. |
4.50% APY. |
4.05% APY. |
4.05% APY. |
4.05% APY. |
3.85% APY. |
3.60% APY. |
3.00% APY. |
2.10% APY. |
2.10% APY. |
1.90% APY. |
1.20% APY. |
0.90% APY. |
|
LendingClub, Member FDIC. |
4.65% APY. |
4.50% APY. |
4.50% APY. |
4.50% APY. |
4.50% APY. |
4.25% APY. |
4.25% APY. |
4.25% APY. |
4.25% APY. |
4.00% APY. |
4.00% APY. |
4.00% APY. |
3.60% APY. |
3.25% APY. |
3.12% APY. |
2.07% APY. |
2.07% APY. |
2.07% APY. |
1.26% APY. |
0.85% APY. |
|
National brick-and-mortar banks |
||||||||||||||||||||
|
Bank of America, Member FDIC. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
|
Chase Bank, Member FDIC. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
0.01% APY. |
Methodology
We closely examined more than ninety financial institutions and financial service providers, including the biggest banks in the United States according to assets, internet search traffic, and other metrics; the biggest credit unions in the country according to membership and assets; and other prominent and/or up-and-coming players in the market. We evaluated them based on a number of factors, such as fees, minimum balance requirements, digital experience, and annual percentage yields.
Among the financial providers and entities questioned are: Affirm, Alaska USA Federal Credit Union, All America Bank, Alliant Credit Union, Ally Bank, Amalgamated Bank, America First Credit Union, American Express National Bank, Andrews Federal Credit Union, Associated Bank, Axos Bank, Bank of America, Bank5 Connect, Bank7, Barclays, Bask Bank, Bethpage Federal Credit Union, BMO, BMO Alto, Boeing Employees Credit Union, Bread Savings, BrioDirect, Capital One, Carver Federal Savings Bank, Charles Schwab Bank, Chase, Chime, CIBC U.S., CIT Bank, Citibank, Citizens, Citizens Bank, City First Bank, Climate First Bank, Commerce Bank, Community First Credit Union of Florida, ConnectOne Bank, Connexus Credit Union, Consumers Credit Union, Current, Delta Community Credit Union, Discover Bank, E*TRADE, EverBank (formerly TIAA Bank), Fifth Third Bank, First Foundation, First National Bank, First Tech Federal Credit Union, Flagstar Bank, FNBO Direct, GO2bank, Golden 1 Credit Union, Greenwood, Hope Credit Union, Huntington Bank, Industrial Bank, Ivy Bank, KeyBank, Lake Michigan Credit Union, LendingClub Bank, Liberty Bank, Live Oak Bank, M&T Bank, Marcus by Goldman Sachs, Nationwide (by Axos), Navy Federal Credit Union, NBKC, One, OneUnited Bank, Pentagon Federal Credit Union, PNC, Popular Direct, Quontic Bank, Regions Bank, Revolut, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, Securityplus Federal Credit Union, Self-Help Credit Union, Service Credit Union, SoFi, State Employees’ Credit Union of North Carolina, Suncoast Credit Union, Synchrony Bank, TAB Bank, TD Bank, Truist Bank, U.S. Bank, UFB Direct, Upgrade, USAA Bank, Varo, Vio Bank, Wells Fargo and Zynlo Bank.