A high yield savings account is one of the best places to keep your money if you want to earn a competitive interest rate with little risk. High yield savings accounts offer much higher annual percentage yields (APYs) than traditional savings accounts, allowing your money to grow faster.
In 2024, the best high yield savings accounts are offering APYs around 5% or more. This is significantly higher than the average savings account rate of just 0.46%, according to the FDIC. With a high yield account, you can maximize your savings growth without having to take on investment risk.
What is a High Yield Savings Account?
A high yield savings account is a type of FDIC insured deposit account that pays an elevated interest rate compared to standard savings accounts. These accounts are offered by online banks, credit unions, and some brick-and-mortar banks.
The “high yield” refers to the fact that these accounts offer APYs much higher than the national average. Top yields on high yield accounts today are about 10-50 times higher than average savings rates.
High yield savings accounts work similarly to traditional savings accounts, with a few key differences:
- Higher Interest Rates – The top high yield savings accounts offer 5% APY or more. Traditional savings accounts pay less than 0.5% on average.
- Online Banks – Most high yield savings accounts are offered by online banks since they have lower overhead costs to pass savings to customers.
- Minimum Balances – Some high yield accounts require a minimum deposit or balance to open an account or earn interest.
- Withdrawal Limits – Withdrawals from high yield savings accounts may be limited to 6 per month by some banks.
- Variable Rates – The interest rates on high yield savings accounts can fluctuate over time, while rates on CDs are fixed.
Benefits of High Yield Savings Accounts
Here are some of the main benefits that high yield savings accounts offer versus traditional savings accounts:
Earn More Interest
The top reason to open a high yield savings account is to earn a significantly higher interest rate. This allows your money to grow faster over time without any extra effort on your part. Even an extra 1% in APY makes a big difference in long term growth.
FDIC Insured
High yield savings accounts are FDIC insured up to $250,000 per depositor, per bank. This protects your money in case of a bank failure. Be sure to open accounts only at FDIC insured banks.
Flexible Access
Unlike CDs, high yield savings accounts allow easy access to your money. You can withdraw funds anytime without penalties. This makes them ideal for short term savings goals where you may need the money soon.
Convenient Online Access
Most high yield savings accounts are offered by online banks, allowing 24/7 account access from your computer or mobile device. You can manage your account fully online.
Organize Savings Goals
Some banks let you open separate high yield savings accounts or “buckets” to save for different goals like an emergency fund, vacation, or home down payment.
Top 7 High Yield Savings Accounts of 2024
1. Bread Savings – 5.15% APY
Bread Savings offers a straight-forward high yield savings account with an excellent 5.15% APY as of January 2024. You need a minimum $100 opening deposit. There are no monthly fees or minimum balance requirements. Bread Savings also offers easy online account opening and convenient mobile banking.
2. CIT Bank – 5.05% APY
CIT Bank’s high yield Money Market Account offers a 5.05% APY on all balances with no minimum deposit or balance requirements. You are limited to 6 withdrawals per month. CIT Bank also offers 24/7 live customer service to account holders.
3. Marcus by Goldman Sachs – 4.50% APY
Marcus high yield online savings from Goldman Sachs pays 4.50% APY with no monthly fees or minimums. You can open an account easily online with their mobile app. Marcus also has helpful budgeting tools and savings goal features.
4. Ally Bank – 4.35% APY
Ally Bank is one of the largest online banks and a consistent leader in high yield savings rates. Their Online Savings Account offers 4.35% APY with no minimum balance or monthly fees. Ally also has no overdraft fees.
5. Synchrony Bank – 4.75% APY
Synchrony Bank offers a High Yield Savings account with a strong 4.75% APY and no account fees or balance requirements. Perks include ATM fee reimbursement and one of the best online and mobile platforms.
6. LendingClub – 4.65% APY
LendingClub offers a standard High-Yield Savings account with 4.65% APY, no monthly fees, and a low $100 minimum opening deposit. Easy online account opening and management makes this a top pick.
7. TAB Bank – 5.27% APY
TAB Bank offers one of the highest savings yields at 5.27% APY. There are no monthly fees or minimum balance requirements. You can open an account with any amount. TAB Bank accounts must be managed online.
What to Look for in a High Yield Savings Account
When searching for the best high yield savings account for your needs, keep the following features in mind:
Competitive APY
The Annual Percentage Yield is the most important factor, as this determines how much interest you’ll earn. Prioritize accounts offering at least 4% APY or more.
Low Minimum Deposit
Many high yield accounts can be opened with as little as $0 to $100 minimum deposit. Look for a low minimum to get started.
Low or No Monthly Fees
Try to find an account with no monthly maintenance fees. Otherwise, look for low fees and ways to waive them.
FDIC Insured
Make sure any banks you consider are insured by the FDIC to protect your deposits up to $250,000.
Easy Online Access
Since most high yield accounts are at online banks, you’ll want a user-friendly website and mobile app.
Helpful Features
Consider extra features like ATM fee rebates, overdraft protection, and budgeting tools.
Who Should Get a High Yield Savings Account?
Just about anyone can benefit from opening a high yield savings account, rather than keeping funds in a traditional low interest savings account. Here are a few examples of ideal users:
- Savers – If you have short term savings goals or are growing an emergency fund, a high yield account allows your money to earn significantly more over time.
- Students – A high yield savings account is a great place for students to park financial aid refunds, graduation gift money, or part-time job earnings so the balance grows.
- Retirees – Retirees may keep a portion of retirement savings in high yield savings to earn interest while keeping the money accessible if needed.
- Military Families – Active duty military members who receive pay allotments can take advantage of high yield savings accounts for short term savings goals.
- Freelancers – Freelance workers with fluctuating incomes commonly use high yield savings accounts to stash their earnings until tax time.
- Young Families – Young families can use high yield savings when saving for a new baby, vacation fund, or home down payment.
How to Open a High Yield Savings Account
Opening a high yield savings account online is quick and convenient. Follow these steps:
- Compare Accounts – Research accounts at online banks and credit unions to find the best APY, fees, and minimum balance.
- Apply Online – Fill out the application directly on the bank’s website. You’ll provide personal information and link external bank accounts.
- Make Initial Deposit – Most high yield savings accounts require a minimum opening deposit. You can transfer funds electronically from another bank account.
- Set Up Account Access – If available, download the bank’s mobile app and set up online banking access.
- Automate Transfers – Consider setting up recurring automatic transfers from a checking account to regularly grow your high yield savings.
Alternatives to High Yield Savings Accounts
While high yield savings accounts offer strong interest earnings with little risk, there are other savings options to consider as well:
- Money Market Accounts – MMAs function similar to savings accounts but may offer debit cards and checks for easy access to funds. Minimum balances and monthly fees are common though.
- CDs – Certificates of deposit lock in a fixed interest rate for a set period of time. This option is best if you don’t need access to the money for 1-5 years. Early withdrawal penalties apply.
- Savings Bonds – These government-backed bonds earn interest while preserving principal. Interest compounds semiannually and bonds have 30 year maturity terms.
- Rewards Checking – Some checking accounts earn interest and cash back rewards on debit card purchases. But yields are lower than high yield savings.
Key Takeaways on High Yield Savings Accounts
- High yield savings accounts offer 5x – 50x higher interest rates than average savings accounts, allowing faster growth on your money.
- Stick to FDIC insured accounts at reputable banks and credit unions to keep your money safe.
- Look for the highest Annual Percentage Yields when comparing accounts. Prioritize rates of at least 4% APY or more.
- Online banks tend to offer the most competitive high yield savings account rates and easy online access.
- Open a high yield savings account for short-term savings goals where you may need access to your money soon.
- High yield savings accounts are quick and easy to open online in minutes. Just provide basic personal info and your initial deposit.
 Frequently Asked Questions
Are high yield savings accounts safe?
Yes, high yield savings accounts are federally insured by the FDIC or NCUA so your money is protected in case of bank failure. Be sure to open accounts only at insured banks and credit unions.
How much interest can I earn with a high yield savings account?
Top high yield savings accounts currently offer around 5% APY. On a $10,000 balance, this would earn about $500 in interest after one year.
Can I lose money in a high yield savings account?
No, you cannot lose money that is deposited in a standard FDIC or NCUA insured high yield savings account. Your principal and earned interest are protected.
Are withdrawals limited on high yield savings accounts?
Some banks may limit you to 6 withdrawals or transfers per monthly statement period. There is no limit to in-person withdrawals at a bank branch.
Are rates guaranteed to stay the same on high yield savings accounts?
No, interest rates on high yield savings accounts can fluctuate over time. They are not fixed like CD rates. Shop for the best rates whenever opening a new account.
