- High-yield savings accounts offer premium interest rates.
- The best rates are often offered by online-only banks.
- Current banks offering high-yield savings accounts include: BrioDirect (apy% APY), UFB Direct (4.57% APY), Western Alliance (4.70% APY), American Express National Bank, Member FDIC (apy% Annual Percentage Yield). (Skip ahead to compare savings accounts)
- It’s important to learn key savings-related terms such as annual percentage yield, FDIC and compound interest.
- Annual percentage yields (APY) fluctuate depending on Fed rates.
- Before opening an account, ask about minimum balance requirements, monthly maintenance fees, service fees and other rules related to online savings.
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On This Page
- Key Takeaways
- Our top picks for high-yield savings accounts
- High-yield savings account rates
- Are high-yield savings accounts safe?
- What is a high-yield savings account?
- High-yield savings account terminology
- How to choose the best high-interest savings account
- Pros and cons of a high-yield savings accounts
- How to open a high-yield account
- Is a high-yield savings account worth it?
- Compare our top savings accounts
- Alternatives to high-yield savings accounts
- Our top picks for high-yield savings accounts
- FAQs: High-yield savings accounts
- Related topics
On This Page
- Key Takeaways
- Our top picks for high-yield savings accounts
- High-yield savings account rates
- Are high-yield savings accounts safe?
- What is a high-yield savings account?
- High-yield savings account terminology
- How to choose the best high-interest savings account
- Pros and cons of a high-yield savings accounts
- How to open a high-yield account
- Is a high-yield savings account worth it?
- Compare our top savings accounts
- Alternatives to high-yield savings accounts
- Our top picks for high-yield savings accounts
- FAQs: High-yield savings accounts
- Related topics
Best High-Yield Savings Accounts of November 2024: Up To 5.25% APY
Reviewed By
Blake Esken - Los Angeles Times
High-yield savings account rates
Unless otherwise stated, your savings account doesn’t have a fixed APY. Most interest rates tied to savings accounts will fluctuate, sometimes drastically, in accordance with changes in the Fed rates. This is called a variable rate.
When the economy is doing well, the Federal Reserve tends to raise rates and banks and credit unions follow suit. The Fed’s goal is to help stabilize the economy and even out consumer buying and spending.
When the economy is struggling, the Fed tends to lower rates and banks and credit unions react accordingly. This makes it easier for consumers to borrow money and funnel cash back into the marketplace, thereby stimulating the economy. Unfortunately, what’s good for the economy isn’t always the best for your savings account.
Savings account interest rates may also change just because the bank wants to change them. Traditional banks tend to be more conservative with their rates, but online banks may boost interest rates to stay competitive and attract new clients.
APY rates across U.S. banks plummeted during the 2020 pandemic, but they’ve slowly and steadily been making a comeback. According to the Federal Deposit Insurance Corporation (FDIC), the average savings APY in April 2022 was just 0.06%. As of August 2024, this average rate has climbed to 0.46%. Online banks often offer a high APY closer to the national savings rate cap, which since November 2023 has been set at 6.08%.
Our top 3 recommended high-yield savings accounts
Has one of the most competitive rates
![displayname]()
BrioDirect Savings Account
FDIC Insured
rates_last_updated
rates_last_updated
APY
apy
Monthly Fee
$0.00
Minimum Opening Deposit
$5000.00
4.70% APY on balances of $5,000 or more
CIT Platinum Savings Account
Member FDIC
rates_last_updated
rates_last_updated
APY
apy
Monthly Fee
$0.00
Minimum Opening Deposit
$0.00
4.50% APY on balances from $0 to $250,000
Barclays Tiered Savings Account
LEARN MORE
FDIC Insured
Rates updated as of 11/05/2024
Rates updated as of 11/05/2024
APY
Tiered Savings Account: 4.50% - 4.80%
Online Account: 4.10%
Online Account: 4.10%
Monthly Fee
$0
Minimum Opening Deposit
$0
7% interest savings accounts
As of October 2024, no banks are offering 7% interest rates on savings accounts. For more information, please see our guide 7% interest savings accounts.
5% interest savings accounts
It is possible to find a 5% interest savings accounts, especially if you’re willing to work with an online-only bank. Some of the banks offering the highest APY on savings accounts do require minimum deposit amounts and minimum average balances to ensure those high-interest earnings.
12% interest savings accounts
Currently, no U.S. banks are offering 12% interest on savings accounts. Instead, you would need to look at risker investment options to achieve this rate. You can read more about this in our guide on 12% interest savings accounts.
Are high-yield savings accounts safe?
Your online savings are safe as long as you’ve stowed them away in an FDIC-insured account. The FDIC protects consumer deposits for up to $250,000 per depositor, per institution. Anything up to $250,000 in a single account at a U.S. bank covered by the FDIC will be reimbursed to you if your bank or credit union fails.
If you have more than $250,000 to place in savings, it’s a good idea to maximize your protection by utilizing multiple accounts across multiple banks.
Otherwise, the only way you can lose money from your savings account is by paying out more in fees than you accrue in interest. Read the fine print on your account so you know exactly how much you’re paying in maintenance fees and other costs. Then, find out if there’s a way you can avoid those charges such as by raising your minimum balance or reducing your average number of monthly transactions.
What is a high-yield savings account?
High-yield savings accounts are designed to help people stockpile money while also generating extra funds courtesy of the best APY.
Imagine you’ve paid all your bills for the month and find yourself with some money left over. Or perhaps you’re intentionally building savings for a specific purpose, such as paying college tuition or completing a home remodel. Putting your cash in an interest-bearing online bank account helps maximize your return. Instead of just sitting there, your money is actually working for you.
Here’s how different online savings accounts and high APY can impact your savings*.
| Type of account | Initial deposit | Interest rate/Annual percentage yield (APY) | Time period | Total ending amount |
|---|---|---|---|---|
| Standard savings account | $5,000 | 0.46% | 5 years | $5,116.31 |
| High-yield savings account | $5,000 | 4% | 5 years | $6,083.26 |
*This chart demonstrates the basic difference between standard and higher-interest savings accounts, assuming interest compounds daily. The actual amount of interest accrued depends on various factors, including whether there are additional deposits, if the account terms include simple or compound interest and how often interest is compounded.
Note that most higher-interest accounts are offered by online banks and credit unions, as these institutions have less overhead compared to brick-and-mortar banks and can offer better rates for these types of savings accounts.
High-yield savings account terminology
As you get to know the ins and outs of high-yield saving accounts and how they work, it’s important to familiarize yourself with some of the most common and significant terminology.
- Annual percentage yield (APY): Your APY is the interest rate you earn based on an annual rate of return. APY is rarely locked in. Instead, it can change alongside fluctuations in the federal funds rate as determined by the Federal Reserve.
- FDIC insurance: When you see “member FDIC” listed beside a credit union or bank’s name, it means they’re FDIC-insured and you have federal coverage safeguarding up to $250,000 per depositor for that institution.
- Compound interest: Compound interest is desirable because it stacks earnings on top of earnings. You not only earn interest on your initial deposit, but also on the total value of your account as it continues to earn interest. This means that the same APY will earn you more in interest the longer you keep money in your account.
- Minimum deposit requirement: Your minimum deposit is how much money your bank or credit union requires for you to open a savings account.
- Monthly maintenance fee: Some banks and credit unions charge a monthly maintenance fee to cover administrative costs associated with your account. You may be eligible to pay lower fees if you have an online account versus an account with a brick-and-mortar bank. Your financial institution may also waive the monthly service fee if you maintain a high minimum balance or complete a certain number of direct deposits each month.
- Wire transfer: This is one way you can transfer money into your savings account. Wire transfers are safe and easy, especially if you’re looking to move money from one account to another. But they’re often subject to fees and it can take up to five business days for transferred money to hit the destination account.
How to choose the best high-interest savings account
Before you choose where to open your online savings account, consider these factors:
- Interest rates/APY: Review multiple banks to see which one has the most competitive rates.
- Deposit requirements: Ask about minimum deposit and overall balance requirements so you know how much you have to transfer to open an account and how much you need to leave in the account to avoid fees.
- Access points: Will you be able to access your account online? How about through an ATM card or via your bank’s mobile app?
- Account fees: Know in advance what you’ll be paying in terms of maintenance fees and monthly service fees, as well as what penalties may apply for failing to meet minimum balance requirements.
- Compounding frequency: Interest can compound daily, monthly, quarterly or yearly, and that frequency can heavily influence your long-term savings.
Pros and cons of a high-yield savings accounts
Below are some pros and cons of having a high-yield savings account.
Pros
- Above average APY compared to traditional savings accounts.
- High-yield savings accounts offered by FDIC-insured banks and credit unions are protected for up to $250,000 in deposits.
- Typically offered and managed completely online, allowing for easy access, higher APY and greater flexibility.
Cons
- Some high-yield savings accounts require higher minimum balances, which can be harder to meet for those just beginning to save money.
- Low withdrawal limits can make it difficult to access your funds when you need to.
- Some banks only offer high-yield accounts with attractive interest rates to new customers, meaning you may be forced to switch banks to take advantage of premium rates.
- Online savings accounts may lack in customer service as there’s no ability to meet with bank representatives face-to-face.
Understanding the pros and cons of high-yield savings accounts can help you decide if a high-yield savings account is right for you, so you can start earning more interest than a regular savings account.
How to open a high-yield account
It’s fairly easy to open a high-yield online savings account.
You just need to provide basic information, such as your legal name, an up-to-date address and your Social Security number. For joint accounts, both parties need to provide the required information.
Next, you’ll need to fill out an application. Once you’re approved, you can make your initial minimum deposit and start earning interest!
What if I can’t open a high-interest savings account?
Banks sometimes deny online savings account applications if the applicant has a negative ChexSystems report or their credit score is too low. Even if you can’t open a high-interest account, you may get a better-than-average APY simply by opening a traditional online savings account.
Is a high-yield savings account worth it?
High-yield accounts are worth it if you’re looking to maximize your interest earnings and you don’t mind dealing with a few restrictions. Look for surcharge-free accounts and flexible terms to make the most of your banking relationship.
Compare our top savings accounts
Bank
APY
Monthly fee
Minimum opening deposit
More details
Tiered Savings Account: 4.50% - 4.80%
Online Account: 4.10%
Online Account: 4.10%
$0
$0
LEARN MORE
FDIC Insured
Rates updated as of 11/05/2024
Rates updated as of 11/05/2024
apy%
$0.00
$0.00
FDIC Insured
Rates rates_last_updated
Rates rates_last_updated
Alternatives to high-yield savings accounts
High-yield online savings accounts aren’t the only option for stowing away money and earning interest at the same time.
Here are some alternatives worth exploring:
-
CDs: Certificates of deposit (CD) offer great interest rates but lock up your funds for a predetermined amount of time – often one, three or five years. Best short-term CDs:
- Banc of California 3-month CD - 5.34% APY
- SkyOne Federal Credit Union 5-month CD - 5.00% APY
-
Money market accounts: Money market accounts combine the best aspects of checking and savings accounts. They often offer flexible banking, direct deposit, overdraft protection, above-average interest rates and more reasonable minimum deposit requirements. Best money market accounts:
- Hanover Bank money market account - 5.27% APY
- Ponce Bank money market deposit account - 5.26% APY
-
Interest-bearing checking accounts: Some checking accounts, particularly those offered by online-only banks, offer interest rates that fall somewhere between traditional checking and high-yield savings accounts.
FAQs: High-yield savings accounts
How much will $1,000 make in a high-yield savings account?
How much you will earn with $1,000 in a high-yield savings account depends on the APY. With a 4.50% APY and make no additional deposits, you would earn $45 in interest over one year. If the APY is 5.00%, you would earn $50 in interest over the same period.
How much will $10,000 make in a high-yield savings account?
If you deposit $10,000 in a high-yield savings account with a 4.50% APY and make no additional deposits, you would earn $450 in interest over one year. If the high-yield savings account has an APY of 5.00%, you would earn $500 over one year.
Why are most high-yield savings accounts online?
It’s more common to find high-yield savings accounts paired with online banking because online-only financial institutions have lower overhead and can afford to offer more attractive rates.
Are high-yield savings rates increasing?
Interest rates have been on the rise since 2022. This includes high-yield savings account rates, which are typically much closer to the savings national interest cap (about 6.08%) rather than the national average (0.46% as of August 2024).
Can I withdraw money from my high-yield savings account?
Most savings accounts set a limit on how many times you can make withdrawals every month. Unlike checking accounts, savings accounts aren’t designed to accommodate bill payments and daily needs such as point-of-sale transactions. That said, some banks allow savings account holders to make a certain amount of withdrawals each month without incurring fees or other penalties.
How often can I take money out of a high-yield savings account?
Most banks limit customers to a maximum of six savings account withdrawals per month. However, the Fed raised the recommended withdrawal limit in 2020 to help Americans cope with financial changes resulting from the COVID-19 pandemic.
Ask your bank about their guidelines to find out exactly how often you can access your savings and make sure you always maintain your minimum balance.
How do I move money in and out of a high-yield savings account?
You can move money in and out of your savings account using a wire transfer or ACH transfer or by linking your accounts and taking advantage of your bank’s mobile app. Some banks also offer account holders the ability to withdraw and deposit money to and from checking and savings accounts using an ATM card.
What is the highest interest high-yield savings account?
Online banks often offer the highest APY for savings accounts because they have less overhead and more room to adjust and experiment with competitive rates. Remember that APY is variable, not fixed, so the institution offering the highest rate today may have a lower rate tomorrow.
About the Author
Alana Luna (Musselman) is a versatile storyteller with over a decade of writing experience. She is passionate about helping people build their business through unique and engaging content.
Some examples of her current freelance projects include building content strategies for small businesses, completing industry research to build case studies, crafting buyer guides and more.
She has a passion and keen ability to simplify complex ideas through storytelling to make it easier for readers to understand hard-to-digest information. To accomplish this, Alana’s writing holds strong three principles – content that educates, engages and entertains.
About the Reviewer
Blake Esken has over 15 years of experience in product management and has been a member of the Los Angeles Times staff for over five years.
As part of his role at the Los Angeles Times Commerce Team, Blake acts as the in-house reviewer and fact checker for LA Times Compare. He supervises all content for compliance and accuracy and puts to use skills he has honed through years of experience managing high-stakes projects for a range of industry-leading companies.
He has a strong background in data analysis, compliance, and communication, which allows him to support LA Times Compare through fact-checking in an effort to provide up-to-date and factual information across our content.
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