High-yield savings APYs change, and an advertised rate may apply only to part of your balance or require monthly activity. Compare current disclosures, balance limits, and eligibility before choosing an account.
High-Yield Savings Accounts to Compare
The high-yield savings accounts below offer different variable APYs, so compare their current disclosures. Compare each account’s current APY, balance limits, and eligibility before deciding which fits your savings goals.
1. Raisin
Raisin is a savings marketplace that partners with federally insured banks and credit unions to offer savings accounts and CD rates available. The APYs on those options can change with market conditions.
2. Varo
Varo is a fintech company that acquired its own banking charter in 2020. While it operates like an actual bank, its banking services are offered online and through its app.
3. Digital Federal Credit Union
Digital Federal Credit Union (DCU) is a nationwide credit union based in Massachusetts, serving over 900,000 members across all 50 states. Membership is open through select employers, organizations, family relationships, or residency in certain communities.
4. Consumers Credit Union
Michigan-based Consumers Credit Union is open to anyone who lives, works, or worships in the Lower Peninsula.
5. Happen Bank
Happen Bank is an online bank known for its high-yield savings account, personal loans, auto refinancing, and digital banking products.
6. Netspend
Netspend is a financial services company specializing in reloadable prepaid debit cards that function independently of traditional bank accounts.
7. Blue Federal Credit Union
Blue Federal Credit Union, headquartered in Cheyenne, Wyoming, has been serving members since 1950.
Alternative High-Yield Options
If the savings accounts above do not align with your needs, there are other avenues to grow your savings. Each alternative comes with its own set of benefits and considerations.
Certificates of Deposit (CDs)
CDs offer a fixed interest rate for a set term, which provides predictable returns. In exchange, you agree to leave your money untouched for the length of the term, and early withdrawals usually trigger a penalty. Because of this structure, CDs often pay more than standard savings accounts.
Short-term government securities, such as 1-year Treasury bills, are commonly used as a reference point when comparing CD rates. When Treasury yields rise or fall, CD rates typically move in the same direction, though bank offerings can vary based on competition and funding needs.
Money Market Accounts
Money market accounts blend features of checking and savings accounts, allowing limited check-writing and debit transactions while offering competitive interest rates. They may have higher minimum balance requirements and could impose monthly fees. It’s essential to compare offerings to find one that aligns with your financial habits.
High-Yield Checking Accounts
Some banks and credit unions offer high-yield checking accounts with higher interest rates than many standard checking accounts. However, these accounts often come with stipulations, such as maintaining a minimum balance, conducting a certain number of monthly debit transactions, or setting up direct deposits. Ensure you can meet these requirements to benefit fully.
Crypto Savings Accounts
Crypto savings accounts allow you to earn interest on your cryptocurrency holdings, often at attractive rates. However, they come with notable risks:
- No FDIC Protection: Unlike traditional bank accounts, crypto savings accounts aren’t insured by the Federal Deposit Insurance Corporation, exposing you to potential loss.
- Market Volatility: Cryptocurrency values can fluctuate significantly, affecting the overall value of your holdings.
- Regulatory Uncertainty: The evolving regulatory landscape can impact the operations of crypto platforms, influencing your investments.
See also: How to Make Money With Cryptocurrency
U.S. Treasury I Bonds
U.S. Department of the Treasury I Bonds are government-backed savings bonds designed to help protect your money from inflation. Their return is based on a composite rate, which combines a fixed rate set at purchase with an inflation-adjusted rate that resets every six months.
Because the inflation component changes twice per year, I Bond rates move over time rather than staying locked. As inflation rises or falls, future composite rates adjust accordingly.
Key considerations include:
- One-year minimum holding period: I Bonds cannot be redeemed within the first 12 months.
- Early redemption penalty: Cashing out before five years means forfeiting the last three months of interest.
- Purchase limits: Individuals may buy up to $10,000 per year in electronic I Bonds through TreasuryDirect.
I Bonds are often compared to high-yield savings accounts and certificates of deposit, particularly during periods of elevated inflation. However, liquidity restrictions make them better suited for medium-term savings rather than short-term cash needs.
Cash Management Accounts
Offered by brokerage firms and robo-advisors, cash management accounts function similarly to traditional bank accounts but often provide higher interest rates. They typically come with features like:
- Higher FDIC Insurance Limits: Through partnerships with multiple banks, these accounts can offer increased insurance coverage.
- Banking Services: Features may include direct deposit, online bill pay, and access to fee-free ATMs.
When considering these alternatives, assess factors such as liquidity needs, risk tolerance, and how each option aligns with your financial goals.
How to Choose a High-Yield Savings Account
High-yield savings accounts have different features and requirements. Many have balance limits, deposit requirements, or fees that reduce their appeal. Here’s what to consider before opening one.
Restrictions
Some accounts advertise high interest rates but only apply them to a portion of your balance. Others require specific actions, such as setting up direct deposit or maintaining a minimum balance, to qualify for the highest rate. Always read the fine print to ensure you can meet the requirements.
Fees
High-yield savings accounts should help you grow your money, not drain it with fees. Watch out for monthly maintenance fees, withdrawal limits, and ATM fees, which can eat into your earnings.
Reviews and Ratings
Some banks and credit unions have better customer reviews than others. Check ratings and feedback from current customers to see how they handle customer service, mobile banking, and ease of withdrawals.
Perks
Beyond interest rates, some accounts offer additional benefits, such as:
- Early direct deposit: Get access to paychecks up to two days early.
- ATM fee reimbursements: Some accounts refund fees for out-of-network ATM withdrawals.
- Cash back on debit purchases: A few high-yield accounts include rewards on everyday spending.
Member FDIC or NCUA Insurance
FDIC-insured banks and NCUA-insured credit unions provide added security. If a bank or credit union fails, deposits are protected up to $250,000 per depositor, per institution. Always verify that your chosen financial institution is backed by either the FDIC or NCUA before opening an account.
How to Apply for a High-Yield Savings Account
Most banks and credit unions allow you to apply for a high-yield savings account online. The process typically takes less than 15 minutes.
Each institution has its own application requirements, but most will ask for:
- Basic personal details: Name, address, phone number, and Social Security number.
- Government-issued ID: A passport or driver’s license to verify your identity.
- Initial deposit: Some accounts require a minimum opening deposit, while others let you start with any amount.
Deposit options vary by institution, with many allowing direct deposit or bank transfers. Once your account is set up, make sure you meet any ongoing requirements to maintain the highest interest rate.
Final Thoughts
Compare each account’s current APY, balance limits, and deposit requirements to find one that fits your savings goals.
If a high-yield savings account’s requirements do not fit, alternatives like high-yield checking accounts or CDs can still help maximize your savings. Exploring different options ensures you’re earning the best possible return while keeping your money accessible when you need it.
