Where to find a high yield savings account

High yield savings accounts are offered by online banks, traditional banks with online divisions, and some credit unions. The banks that offer them change which ones pay the highest rates month to month, so the best account for you depends on what matters most: the current rate, whether you want a brick-and-mortar branch, monthly fees, or how much you need to deposit to open an account.

Online-only banks tend to pay higher rates because they have lower overhead costs than banks with physical branches. Banks like Marcus by Goldman Sachs, Ally Bank, and American Express Personal Savings have historically offered competitive rates, though the specific rate each one pays shifts as the Federal Reserve changes interest rates. Traditional banks like Chase, Bank of America, and Wells Fargo offer high yield savings accounts through their online platforms, but their rates are typically lower than online-only competitors.

Credit unions also offer high yield savings accounts, sometimes called share savings accounts. The rate varies by credit union and by how much you deposit. You must be a member to open an account, which usually means living or working in a specific area, belonging to a certain employer, or meeting other membership requirements that vary by union.

Key Takeaways

  • Online-only banks typically offer higher rates than traditional banks because they do not maintain physical branches.
  • The highest-paying banks change as interest rates move, so comparing current rates across multiple banks matters more than picking one brand name.
  • Traditional banks offer high yield savings accounts but usually at lower rates than online competitors, though you may have access to a local branch.
  • Credit unions offer competitive rates but require membership, which depends on your employer, location, or other criteria specific to each union.
  • Most high yield savings accounts have no monthly fees, but some require a minimum opening deposit or minimum balance to earn the advertised rate.

Online banks that offer high yield savings accounts

Marcus by Goldman Sachs offers a high yield savings account with no monthly fees and no minimum opening deposit. The account is FDIC-insured up to $250,000. Marcus does not have physical branches; all banking happens online or by phone.

Ally Bank offers a high yield savings account with no monthly fees and no minimum opening deposit. Ally is an online-only bank owned by Ally Financial. The account is FDIC-insured up to $250,000. Ally also offers money market accounts and certificates of deposit (CDs) at varying rates.

American Express Personal Savings is a high yield savings account offered by American Express Bank, N.A. It requires no monthly fees and no minimum opening deposit. The account is FDIC-insured up to $250,000. You do not need an American Express credit card to open this account.

Discover Bank offers a high yield savings account with no monthly fees and no minimum opening deposit. Discover is an online-only bank. The account is FDIC-insured up to $250,000. Discover also offers money market accounts and CDs.

Capital One 360 (formerly ING Direct) offers a high yield savings account with no monthly fees and no minimum opening deposit. Capital One 360 is an online division of Capital One Bank. The account is FDIC-insured up to $250,000.

Traditional banks with online high yield savings accounts

Most large traditional banks now offer high yield savings accounts through their online platforms, though the rates are usually lower than online-only banks. Chase offers a high yield savings account with no monthly fees and a $0 minimum opening deposit, but the rate is typically lower than online competitors. Bank of America offers a high yield savings account with no monthly fees and a $0 minimum opening deposit. Wells Fargo offers a high yield savings account with no monthly fees and a $0 minimum opening deposit.

The advantage of using a traditional bank is access to physical branches if you need to deposit cash or speak with someone in person. The disadvantage is that rates are usually lower because the bank's costs are higher. If rate is your main concern, online-only banks typically pay more.

Credit unions offering high yield savings accounts

Credit unions are member-owned financial institutions, and many offer high yield savings accounts (often called share savings accounts). Rates vary widely by credit union and by how much you deposit. Some credit unions offer tiered rates, meaning you earn a higher rate if you maintain a larger balance.

To find a credit union near you, use the CO-OP Network locator or the Allpoint ATM network, both of which list participating credit unions. You can also search by employer, location, or affiliation at the Credit Union Locator tool on the CO-OP website. Membership requirements differ: some credit unions serve people in a specific geographic area, others serve employees of a particular company, and some serve members of a professional association or union.

Credit unions are insured by the National Credit Union Administration (NCUA) up to $250,000 per account, the same as FDIC insurance at banks. If you are already a member of a credit union, check their current rates before opening an account elsewhere.

How rates compare across different bank types

Online-only banks have historically offered the highest rates because they have no physical branches to maintain. As of the time this article was written, online banks were paying rates that ranged higher than traditional banks, but the exact rate each bank offers changes as the Federal Reserve adjusts interest rates. The rate you see today will not be the rate you earn next month.

To compare current rates, visit each bank's website directly and note the annual percentage yield (APY) listed for their high yield savings account. The APY is the rate you will earn over one year, including the effect of compounding. Some banks display the rate prominently on their homepage; others require you to click into the account details.

Traditional banks typically offer lower rates than online competitors, but the difference narrows when interest rates are very high or very low. If you already bank with a traditional bank and the rate difference is small, staying with your current bank may be simpler than opening a new account elsewhere.

Minimum deposits and account requirements

Most high yield savings accounts have no minimum opening deposit, meaning you can open an account with $1 or $0. However, some banks require a minimum balance to earn the advertised rate. For example, a bank might advertise a high rate but only pay it if you maintain a balance of $25,000 or more. If your balance drops below that threshold, the rate drops to a lower tier.

Read the account details carefully before opening. The information you need is usually under "Account Terms," "Rates and Fees," or "Account Details" on the bank's website. Look for language about minimum balance requirements, tiered rates, and whether fees explore if your balance falls below a certain amount.

Most high yield savings accounts charge no monthly maintenance fees. Some banks waive fees only if you maintain a minimum balance or set up direct deposit. If fees are a concern, prioritize banks that advertise "no monthly fees" with no conditions attached.

FDIC and NCUA insurance on high yield savings accounts

All high yield savings accounts at FDIC-insured banks are covered by Federal Deposit Insurance Corporation (FDIC) insurance up to $250,000 per depositor, per bank, per account type. This means if the bank fails, your money up to $250,000 is protected. If you have more than $250,000, the amount over $250,000 is not insured at that bank.

High yield savings accounts at credit unions are insured by the National Credit Union Administration (NCUA) up to $250,000 per depositor, per credit union, per account type. The coverage is the same as FDIC insurance, but it applies to credit unions instead of banks.

If you have more than $250,000 to save, you can open accounts at multiple banks or credit unions to keep all your money insured. For example, $250,000 at Bank A and $250,000 at Bank B would both be fully insured. The FDIC and NCUA websites have insurance calculators that show you exactly how much of your money is covered.

Frequently Asked Questions

Do I need a checking account to open a high yield savings account?

No. Most banks allow you to open a high yield savings account without opening a checking account. You can link the savings account to a checking account at another bank if you want to transfer money between them, but it is not required.

Can I withdraw money from a high yield savings account whenever I want?

Yes, but federal rules limit you to six withdrawals per month from a savings account (the limit applies to transfers and withdrawals combined). If you exceed six, the bank may charge a fee or close the account. Money market accounts have the same limit. Regular checking accounts have no withdrawal limit.

What happens to my rate if the Federal Reserve changes interest rates?

Your rate will change. Banks adjust their rates based on what the Federal Reserve does. When the Fed raises rates, banks typically raise their savings account rates within days or weeks. When the Fed lowers rates, banks lower savings account rates. Your bank will notify you of rate changes, usually by email or through your online account.

Is it better to open a high yield savings account at a bank I already use?

Not necessarily. The rate matters more than the bank name. If your current bank offers a much lower rate than competitors, moving your money to a higher-paying bank will earn you more interest, even if it means opening an account elsewhere. The process of opening a new account online takes about 10 minutes.

Can I move money from a high yield savings account to another bank?

Yes. You can transfer money out of a high yield savings account to another bank at any time. Most banks allow you to link an external account and transfer money electronically. The transfer usually takes one to three business days. There are no penalties for closing a high yield savings account or moving your money.