But fortunately, there are high-yield savings accounts that pay rates 20 times or higher than what is typically being paid by local banks. If you’re not taking advantage of these high yield savings accounts, you’re cheating yourself.
Take a look at some of the accounts we’re presenting in this review, and choose the one that will best enable you to take advantage of higher rates than you’re getting at your local bank.
Best high-yield savings accounts overview
|Chase Savings℠||Up Front Bonus|
|CIT Bank Savings Builder||Building your savings|
|Citi Accelerate Savings||Highest APY|
|Discover Online Savings||No fees|
|Capital One 360 Performance Savings||Full-service banking|
|Marcus by Goldman Sachs||Low-cost personal loans|
In-depth analysis of the best high-yield savings accounts
Best biggest bonus: Chase Savings℠
- Minimum balance: $0
- APY: 0.01%
- Monthly fee: $5 (Waived in a variety of ways)
I know what you’re thinking. How can Chase Savings℠, a brand that current offers a 0.01% APY lead our page on the best high-yield savings accounts? Well the simple answer is that it currently offers a $150 bonus for new depositors, meaning that you can easily come away with the greatest 1st year return of any bank on this list.
Chase Savings℠ offers new customers a $150 cash bonus after completing two steps:
- Opening a new account and making at least $10,000 in deposits in the first 20 days (new money only)
- Maintaining that balance for the first 90 days
After maintaining the balance, Chase will deposit your $150 into your account within 10 business days. When you compare the bonus against the brands below that offer up to a 1.00% APY, you’ll see that for a $10,000 initial deposit, the bonus money you’ll earn on top of your deposit means the best return is here with Chase.
The elephant in the room with Chase Savings℠ is that there is a $5 monthly fee on the account. However, that fee is waived if you can maintain a daily balance of at least $300 (which should be easy if you’re depositing $10,000) so you won’t have to worry about it. You can also have it waived if you’re a college student, if you make at least a $25 monthly auto-save transfer from your Chase checking account or in a few other ways.
Best for building savings: CIT Bank Savings Builder
- Minimum balance: $100
- APY: 0.95%
- Monthly fee: $0
The CIT Bank Savings Builder is custom-made for those who want to earn high interest on their savings while building their account from the bottom up.
You can open an account with as little as $100, and earn 0.95% APY as long as you make monthly deposits of $100 or more (otherwise you can earn the top rate with a minimum account balance of $25,000). If you’re unable to meet the $25,000 threshold or to make $100 minimum monthly deposits into your account, the APY drops.
CIT Bank also offers virtually all other banking services. This includes a money market account, and certificates of deposit paying competitive interest rates. The bank also provides app德扑圈官方网址home mortgages.
Best for highest yield: Citi Accelerate Savings & ATM’s
- Minimum balance: $0
- APY: 1.00%
- Monthly fee: $4.50 waived with an average monthly balance of $500 or more
Not only does Citi Accelerate Savings offer one of the highest interest rates in the industry, but it’s also offered by one of the largest banks in America.
That has certain advantages, including an extensive network of bank branches in many states, as well as one of the largest ATM networks (60,000 ATMs) in the country. That will enable you to access your funds from your account using your ATM card without needing to pay a fee.
There’s also no minimum initial balance requirement, and the monthly fee can be waived with an average balance of just $500.
Another advantage of saving with the Citi Accelerate Savings account is that you have access to full-service banking through Citi. This includes many checking account offers and CDs, as well as loan programs, credit cards, business banking and checking accounts that are currently offering up to $700 for new customers!
Best for no fees: Discover Online Savings
- Minimum balance: $0
- APY: 0.80%
- Monthly fee: $0
Discover is best known for its many credit card offerings, including and especially the Discover it series, which consistently offers one of the most generous rewards programs in the credit card industry. But the Discover Online Savings also offers very generous interest rates on an ongoing basis.
Apart from the strong interest, Discover Online Savings is also very light on fees. As we’ve already disclosed, there’s no monthly maintenance fee. But they also don’t charge fees for various situations where most banks do. These include: official bank checks, including expedited delivery of those checks, deposited items return, excessive withdrawal fee, stop payment orders, insufficient funds, or even account closures. There are no fees for any of those activities.
The bank also offers a checking account, money market account, and certificates of deposit. Like some other banks on this list, they offer a 12-month term CD. And once again, opening a Discover Online Savings may also encourage you to take advantage of one of their outstanding credit card offers.
Best for full-service banking: Capital One 360 Performance Savings
- Minimum balance: $0
- APY: 1.00% APY
- Monthly fee: $0
The Capital One 360 Performance Savings pays an APY of 1.00% on all balances. You can make up to six withdrawals or transfers per month (due to limitations imposed by Federal law). However, you can set up an unlimited number of automatic transfers into your account. Accounts can be held either individually or jointly.
There are no fees associated with the Capital One 360 Savings, and there’s no minimum account balance requirement.
What we really like about this account is that Capital One comes the closest to being a full-service online bank.
Not only do they offer high interest money market and savings accounts, but also a no-fee checking account and high-yield CDs. In fact, they’re currently offering a 12-month CD with no minimum balance and an APY of 2.20%. And they even offer auto loans, credit cards, and business and commercial banking.
Best for low-cost personal loans: Marcus by Goldman Sachs
- Minimum balance: $0
- APY: 1.05%
- Monthly fee: $0
This high-yield savings account is provided by Goldman Sachs Bank USA. Not only does it pay a very healthy interest rate, but there are no monthly fees to interfere with your account interest income. You can link with other banks for incoming and outgoing transfers, and the bank provides 24/7 customer service
Marcus by Goldman Sachs doesn’t qualify as a full-service online bank, but they do provide high-yield CDs, in addition to high-yield savings.
For example, they currently provide a 12-month CD with a 1.60% APY, and a minimum investment of just $500. They also provide no-fee, fixed-rate loans, from $3,500 to $40,000. The loans can be used for debt consolidation, credit card consolidation, app德扑圈官方网址home improvements, or online loans. What’s more, rates start as low as 6.99% APR, and come with no fees.
Summary of the best high-yield savings accounts
|Chase Savings℠||0.01% + $150 sign-up bonus||$0||$5 waived with an average monthly balance of $300 or more|
|CIT Savings Builder||0.95%||$100||None|
|Citi Accelerate Savings||1.00%||$0||$4.50 waived with an average monthly balance of $500 or more|
|Capital One 360 Performance Savings||1.00%||$0||None|
|Discover Online Savings||0.80%||$0||None|
|Marcus by Goldman Sachs||1.05%||$0||None|
How to use high yield savings accounts
We recommend that everybody has at least one high yield savings accounts for saving money for your emergency fund – at least six months of monthly living expenses – that you can access immediately if you get sick, lose your income, or face a large unexpected expense.
We also think these savings accounts are great places for saving for short-term goals when you don’t want to risk losing money with higher risk investments. For example, if you’re saving money to buy a new car or for your wedding in the next couple of years, you may be able to get a higher rate of return by investing in a mutual fund or other securities, but in such a short period of time, you may also lose money. Investments are best for savings goals more than a few years away; otherwise, savings accounts are safer.
What to look for in a high-yield savings account
There are certain standout features that can make or break your decision to choose one high-yield savings account over another.
Below are the major considerations when opening an account.
Minimum balance requirements
We’re starting with this as the first criteria, because it will do you little good to move your money into a high-yield savings account that has a minimum balance requirement you can’t meet.
Not all banks have a minimum balance requirement for their high-yield savings accounts. But where they do, there may be as many as three:
- The minimum balance required to open an account
- Minimum balance to maintain the account
- Minimum balance to be eligible for the highest APY
The last requirement refers to tiered interest rates. For example, a bank may advertise a high-yield savings account with an interest rate of 2.10% APY. But that yield may apply only if your account balance has a minimum of $1,000. If it’s less, they may pay only 0.75% APY.
Naturally, interest rate yield is the primary attraction for any high-yield savings account. But be careful of any limitations on those rates.
In the previous section, I pointed out that many banks use tiered interest rates, with the highest rates being paid to larger balances. This is not an uncommon practice, so you’ll need to make sure you’re able to maintain the minimum balance to get the highest rate.
Some banks do offer a sign-up bonus to get you to open an account – you just need to check which bank and when as this information changes all the time. This is certainly a nice feature, but you’ll need to compare it with the interest rate the account is paying, as well as monthly fees that apply.
Also, be aware that sign-up bonuses come with restrictions. Typically, you’ll need to maintain a certain minimum balance for a specific amount of time. This may be six months or even longer. If your account balance drops below the minimum requirement at any time during the first six months, you may forfeit the bonus.
There may also be a delay in receipt of the bonus. For example, the bank may withhold payment of the sign-up bonus for a month or two after you meet the six-month minimum balance requirement. In that way, it may take you seven or eight months before you actually receive the sign-up bonus.
As is always the case when you open any bank account, read the account disclosure, paying particular attention to the fine print. That’s where you’ll find this type of information disclosed.
A few banks do charge a monthly fee on high-interest savings accounts, but many don’t. You should generally favor the accounts that don’t have this fee. However, there are exceptions.
Even if there is a fee, most banks will provide some sort of waiver. For example, the fee may be waived if you maintain a certain minimum balance in your account for each statement cycle. Or it may be waived if you also open a checking account with the same bank.
The moral of the story is that you should never allow the existence of a monthly fee to cause you to pass up a high-yield savings account. First, investigate the waiver opportunities, and if you’re able to comply with them, the monthly fee shouldn’t be a problem.
For most depositors, a high-yield savings account will be something of a static account. Since most of your account access will come through a checking account, the savings account will serve mostly as a warehouse account, where the majority of your savings will be parked to earn high interest.
And when you do need to access funds, you can almost always make electronic transfers into a checking account. That checking account can be either at the same bank where you hold your high yield savings account, or an external account.
But if you want a little bit more access to your account, there are some banks that will give you access to the funds through an ATM card. Just be aware that any activity with the ATM card is likely to be included within the six-monthly transaction limits under federal Regulation D (see FAQ on Regulation D below).
For that reason, ATM cards with a high-yield savings account have limited value. You’ll want to use them only with large withdrawals or purchases, both of which will need to be infrequent.
Always remember that a high-yield savings account is a place where you store your money, while a checking account is the designated high transaction account.
Most banks today offer a mobile app. But this is even more true of high-yield savings accounts since they’re usually offered by either the largest banks, or by those that operate entirely online.
Since both types of banks offer full-service online banking, mobile app access is almost always part of the package. And most mobile apps have all the functionality of online banking.
Mobile app access to your account will be important because it will give you the ability to check on your account no matter where you’re at. You can not only check your account balance and transactions, but also transfer funds to connected accounts, like your checking account. Being able to do that through a mobile app is much more convenient than needing to access your account through a web platform.
But there’s one other advantage to having a mobile app, that’s gotten much more popular in recent years. That’s mobile check deposits. By snapping a photo of a check you’ve received, you can download it to your account, and have it deposited without ever needing to go to a bank branch.
Pros of online savings accounts
Chances are you have a checking and/or savings account at a bank that has a few—or maybe lots—of branch buildings in your area. But think about it: when’s the last time you visited one? More than likely, you already do most of your banking online, on your phone, and via ATMs.
About 99 percent of the time, you won’t ever miss a branch.
You earn more interest
The online payoff is more interest – these accounts are called “high yield” for a reason. You can earn up to 10 times more interest through an online savings account than you can with a traditional bank. Online banks don’t face as many operating costs as other banks, and they pass on the savings to account holders.
For instance, a brick-and-mortar bank may offer an interest rate between 0.01-0.05 percent on a savings account. The online savings account from Ally offers a one percent interest rate. That’s a significant jump.
To estimate how much you’ll actually be earning in interest, you can calculate the account’s Annual Percentage Yield or APY. An account’s APY shows how much your savings account grows each year in compound interest, not just simple interest. A $1,000 savings deposit at a 1 percent interest rate earns you $10 in simple interest over a year. If the rate’s compounded daily, however, you’ll earn $10.05 a year. This may not sound like much of a bonus. But the more you deposit, the longer you keep the account, and the better your interest rate is, the more the savings add up.
As a bonus, online banks may charge lower rates for mortgages and loans.
Your account has FDIC insurance
Online accounts are likely to come with FDIC insurance, a must for any savings account.
Banks offering FDIC insurance are members of the Federal Deposit Insurance Corporation (or FDIC). The insurance is a protection plan covering your deposits in case the bank goes out of business. Most FDIC plans will insure up to $250,000.
You can bank anytime and anywhere
Online savings accounts simply take the teller out of the banking equation. You open your account online (or by phone) and fund your account either by an electronic transfer from your existing bank or by mailing a check. Once your account is open, you can transfer money to and from your other bank accounts electronically, mail checks to deposit or withdraw cash at an ATM (with certain accounts).
Online banks work around your schedule. You can make deposits, transfer money, pay bills, and see your account activity at any time as long as you have Internet access.
Convenience extends to bank statements and account-related paperwork – you can access those services online too. If you’re moving, or if you don’t live close to any brick-and-mortar banks, it’s still easy to monitor your savings account.
Online banks offer unique services
To make up for the absence of physical branches, online banks work around the clock. You can get your savings account balance at three in the morning if necessary. Customer service (often around the clock as well) is available by phone. As technology develops, online banks adapt accordingly, so you’ll be able to get account services from any phone or mobile device.
Other tools at an online bank’s website may include budgeting and loan calculators, investment analysis, tax preparation, and more low-cost or free services.
You can sync your savings account to other banks
You’re able to transfer money between an online savings account and another account via regular or one-time direct deposits.
You can also withdraw funds if necessary. High-yield online savings accounts are liquid, which means you can take out money at any time – for instance, if you need to access funds while traveling.
Cons of online savings accounts
You don’t get in-person customer services
Though you can talk to customer service representatives over the phone and through online chat, you can’t meet them face to face. If you prefer in-person communication to answer a question, resolve a problem, or discuss your options, you might want to pick a bank with a brick-and-mortar branch.
Some bank account holders, such as those with business accounts, value a personal relationship with their bank. This relationship can come in handy when it’s time to take out a loan or apply for a mortgage. And it’s much easier to cultivate in person.
Besides human interaction, traditional banks offer other important services like notarization, brokerage accounts, investment advice, and bank signature guarantees. Online banks usually don’t have these features.
Additionally, with an online account, you’re placing lots of trust in the Internet. Websites do occasionally go down because of maintenance or unexpected technical issues. If this happens you might temporarily lose access to your account.
Deposits take time
You can add money to your online savings account from other sources. But some online account holders report the process is complicated, especially if you plan to deposit cash.
If you’re depositing a check, the bank may have an application where you can take a picture of the check. Or you can deposit the check in another account and transfer the funds. Cash is trickier. You might have to transfer the cash through a money order or find an ATM that accepts your deposits. For regular cash deposits, a brick-and-mortar bank could be the more practical choice.
Fund transfers may be slow
Expect to wait three-to-five days if you’re transferring money from your online savings account to another bank. If you need the money more quickly, you may have to get it from another account. The best option is to plan ahead if you know you’ll need to withdraw from online savings. Assume a five-day wait.
There’s a risk of security compromise
Whenever you open an online bank account, you should take steps to maximize your personal security. Online banks have encryption software and FDIC protection to keep your information as safe as possible. But you still run the risk of fraud, identity theft, and malware.
Make sure your provider employs protections just in case. For instance, online banks should alert you immediately to any sign of a security breach. And if you’re depositing or withdrawing checks, the bank can make copies of the cleared checks available online.
High yield savings accounts vs Certificates of Deposit (CDs)
A certificate of deposit offers a higher interest rate; shouldn’t I open a CD instead of a savings account?
With a CD, you must leave your money deposited for the entire term (for example, 18 months or five years) to earn the advertised interest rate. If you withdraw any of the money early, you forfeit some of the interest earned, which may result in a lower actual yield than what you would earn in a savings account.
Because we typically have fewer assets when we’re young and have more unexpected expenses pop up, we recommend sticking with a savings account until you have a few months of living expenses saved. At that point, a CD may make sense to get a higher interest rate as you save for a goal that’s a year or more in the future.
FAQs about the best high-yield savings accounts
For most consumers, it’s probably too early to sever your relationship with your local bank, and go completely with a high-yield online bank. But it is time to move the bulk of your savings into high-yield savings accounts, even if you continue to use your local bank for basic services, like checking or business banking.
You owe it to yourself to earn as much interest on your savings as possible. You can do that with high-yield savings accounts, even if you do your more routine banking through your local bank.
Check out one of the high-yield savings accounts on this list, and open one today. Because each day you wait you’re losing money!