Person happy looking at tablet showing growing savings in a high-yield account.

Best High-Yield Savings Accounts: Your Guide

Finding the right place to park your savings can feel overwhelming, but it’s a crucial step towards achieving your financial goals. You work hard for your money, and it should work hard for you in return. Traditional savings accounts often offer minimal interest, meaning your money barely grows, sometimes not even keeping pace with inflation. This is where understanding the best high-yield savings accounts becomes essential.

These accounts offer significantly higher interest rates compared to their traditional counterparts, allowing your savings to grow much faster while remaining safe and accessible. Whether you’re building an emergency fund, saving for a down payment, or planning a big trip, choosing the right high-yield savings account can make a substantial difference. In this guide, you’ll learn everything you need to know about these powerful savings tools, how to compare them effectively, and how to choose the one that best suits your financial situation.

Understanding High-Yield Savings Accounts

Before diving into comparisons, let’s establish a solid understanding of what high-yield savings accounts are and how they function.

What is a high-yield savings account (HYSA)?

A high-yield savings account, often abbreviated as HYSA, is a type of savings account that typically pays a significantly higher interest rate than a traditional savings account found at most brick-and-mortar banks. These accounts are usually offered by online banks or credit unions, which have lower overhead costs compared to traditional banks with physical branches. These savings are passed on to customers in the form of higher interest rates, often referred to as the Annual Percentage Yield (APY).

The primary purpose of an HYSA is to provide a safe place to store money you don’t need immediately while allowing it to grow faster than it would in a standard savings or checking account. They are ideal for short- to medium-term savings goals where preserving the principal amount is just as important as earning some return.

How do HYSAs differ from traditional savings accounts?

While both HYSAs and traditional savings accounts are designed for saving money, there are key differences, primarily in interest rates, accessibility, and associated fees. Online banks, which predominantly offer HYSAs, operate differently than traditional banks with extensive branch networks.

Feature	High-Yield Savings Account (HYSA)	Traditional Savings Account
Interest Rate (APY)	Significantly higher (often 10x or more)	Very low, often close to 0%
Access	Primarily online/mobile app; ATM access may be limited or via network; electronic transfers	Branch access, ATMs, online/mobile app, electronic transfers
Fees	Often fewer fees (e.g., no monthly maintenance fees, lower minimum balance requirements)	May have monthly maintenance fees (often waivable), minimum balance fees, excessive withdrawal fees
Provider	Typically online banks, some credit unions	Traditional brick-and-mortar banks, credit unions

The most striking difference is the APY. As of late 2023 and early 2024, many HYSAs offer APYs above 4.00% or even 5.00%, while the national average for traditional savings accounts hovers near 0.50% according to FDIC data. This difference means your money grows substantially faster in an HYSA.

The benefits of using an HYSA

Choosing an HYSA offers several compelling advantages for savers:

Higher Interest Earnings: This is the primary benefit. The significantly higher APY means your savings balance grows much more quickly over time thanks to the power of compound interest.
Liquidity: Unlike investments or certificates of deposit (CDs), your money in an HYSA is generally accessible when you need it. You can typically transfer funds electronically to a linked checking account within a few business days. This makes HYSAs excellent for emergency funds.
Safety: Just like traditional savings accounts, HYSAs offered by FDIC-insured banks or NCUA-insured credit unions are protected up to the standard maximum deposit insurance amount (currently $250,000 per depositor, per insured bank, for each account ownership category). This means your principal is safe, even if the bank fails.
Low Fees: Many HYSAs, especially those from online banks, have no monthly maintenance fees and low or no minimum balance requirements. This ensures more of your money goes towards earning interest, not covering bank costs.
Encourages Saving: Seeing your savings grow at a noticeable rate can be motivating and encourage more consistent saving habits.

How HYSAs earn interest (compound interest explanation)

HYSAs grow your money through compound interest. This means you earn interest not only on your initial deposit (the principal) but also on the accumulated interest from previous periods. It’s essentially “interest earning interest.”

Here’s a simple illustration: Suppose you deposit $10,000 into an HYSA with a 5.00% APY, compounded daily.

After Day 1: You earn a small amount of interest.
After Day 2: You earn interest on the original $10,000 plus the interest earned on Day 1.
Over Time: This process repeats, and the amount of interest earned each day gradually increases because the balance it’s calculated on keeps growing.

The more frequently interest compounds (daily is common for HYSAs), the faster your money grows compared to less frequent compounding (like quarterly or annually).

Are HYSAs safe?

Yes, HYSAs are generally very safe, provided they are held at an institution insured by the Federal Deposit Insurance Corporation (FDIC) for banks or the National Credit Union Administration (NCUA) for credit unions.

FDIC Insurance: Covers deposits at member banks up to $250,000 per depositor, per insured bank, for each account ownership category. This protects your money in the unlikely event the bank fails. You can verify a bank’s FDIC insurance using the FDIC BankFind tool.
NCUA Insurance: Provides equivalent coverage ($250,000 per member, per insured credit union, for each account ownership category) for deposits at member credit unions through the National Credit Union Share Insurance Fund (NCUSIF).

This government-backed insurance makes HYSAs one of the safest places to keep cash you need protected and accessible. For more information on safe banking practices and deposit insurance, explore our resources.

Key Factors When Choosing an HYSA

With numerous options available, selecting the right HYSA requires careful consideration of several key factors beyond just the advertised interest rate.

Annual Percentage Yield (APY) – What it means and how it’s calculated

The Annual Percentage Yield (APY) is the total amount of interest you will earn on a deposit account in one year, assuming you don’t add or withdraw funds. It includes the effect of compounding. A higher APY means faster growth for your savings.

APY differs slightly from the simple interest rate. The interest rate is the base rate, while the APY reflects how often that interest is compounded. For example, a 4.90% interest rate compounded daily results in a 5.00% APY. Always compare accounts using the APY, as it provides a standardized measure of the actual return.

Important Note: HYSA APYs are typically variable, meaning the bank can change the rate at any time based on market conditions, particularly changes in the federal funds rate set by the Federal Reserve.

Minimum deposit requirements

Some HYSAs require a minimum amount to open the account, while others might require a minimum balance to earn the advertised APY or avoid fees. Many online banks offer HYSAs with $0 minimum opening deposits and no ongoing balance requirements, making them highly accessible. Check the terms carefully, especially if you are starting with a small amount.

Fees (monthly fees, withdrawal fees, transfer fees, etc.)

Fees can significantly erode your interest earnings. Look for HYSAs with:

No monthly maintenance fees: Most competitive online HYSAs do not charge these.
Low or no minimum balance fees: Avoid accounts that penalize you if your balance dips below a certain threshold.
Reasonable transaction fees: Check for fees related to wire transfers, excessive withdrawals (though Regulation D limits were removed, some banks might still impose internal limits or fees), or returned deposits.
ATM fees: If ATM access is important, understand the bank’s policy. Some online banks partner with ATM networks for fee-free access, while others may offer limited ATM fee reimbursements.

Always read the account’s fee schedule before opening it.

Access to funds (online vs. branch, transfer options)

Consider how you’ll need to access your money. HYSAs from online banks primarily rely on:

Electronic Funds Transfers (EFT): Linking your HYSA to an external checking account allows you to move money back and forth. Standard transfers typically take 1-3 business days.
Mobile Check Deposit: Many apps allow you to deposit checks using your smartphone camera.
Online Bill Pay: Some HYSAs offer this feature.
ATM Access: Less common for HYSAs themselves, but some banks provide an ATM card linked to the account or allow access via a linked checking account.

If you require frequent in-person branch services, an HYSA from a traditional bank (though likely with a lower APY) or a credit union might be a better fit, but most users find online access sufficient for a savings account.

Customer service and online banking features

Since you’ll primarily interact with an online HYSA provider digitally, evaluate their:

Customer Support: Check availability (hours, channels like phone, chat, email) and reputation. Read reviews about responsiveness and helpfulness.
Online Platform/Mobile App: Is the website easy to navigate? Is the mobile app user-friendly and highly rated? Does it offer the features you need (e.g., balance checks, transfers, mobile deposit)?

A smooth digital experience is crucial for managing an online HYSA effectively.

Account features (e.g., budgeting tools, mobile app)

Beyond the basics, some HYSAs offer additional perks:

Savings Goals/Buckets: Tools that let you earmark funds for specific goals within the same account (e.g., “Emergency Fund,” “Vacation Fund”).
Automated Savings Tools: Features that help you set up recurring transfers or round up purchases from a linked account.
Integration with Budgeting Apps: Compatibility with popular financial management software.

While not essential, these features can enhance your saving experience.

Top High-Yield Savings Accounts: A Comparison

Finding the best high-yield savings accounts involves comparing current offers from reputable institutions. Rates and features change, so it’s crucial to check the latest information directly with the banks.

Methodology for selecting top accounts

Our selection focuses on accounts from FDIC-insured banks or NCUA-insured credit unions that consistently offer competitive APYs, have low or no fees, reasonable or no minimum deposit requirements, and provide a good user experience (online/mobile). We aim for a mix of well-established online banks and potentially strong credit union or traditional bank options for comparison.

Disclaimer: The specific accounts and APYs mentioned below are illustrative examples based on information available at a certain point in time. APYs are variable and subject to change. Always verify current rates and terms directly with the financial institution before opening an account.

Review of 3-5 leading HYSAs

Here’s a look at a few types of institutions often offering competitive HYSAs:

Account 1: Online Bank A (Example: Ally Bank)

APY: Often among the highest available (e.g., 4.25% – 4.35% range, check current rate).
Minimum Deposit/Balance: $0 to open, no ongoing minimum balance required.
Fees: No monthly maintenance fees, no overdraft fees (savings accounts typically don’t allow overdrafts), free standard transfers. Potential fees for outgoing wires or returned items.
Features: Highly-rated mobile app, 24/7 customer service (phone/chat), savings buckets/goals, mobile check deposit, easy linking to external accounts, Zelle® integration. Access to large fee-free ATM network (Allpoint) if linked with an Ally checking account.
Pros: Consistently high APY, no fees/minimums, excellent digital tools, strong customer support.
Cons: Online-only, cash deposits can be challenging.

Account 2: Online Bank B (Example: Marcus by Goldman Sachs®)

APY: Typically very competitive (e.g., 4.40% – 4.50% range, check current rate). May offer promotional APY boosts for referrals.
Minimum Deposit/Balance: $0 to open, no minimum balance required.
Fees: No monthly maintenance fees, no transaction fees for standard transfers. Potential wire transfer fees.
Features: Clean online interface, highly-rated mobile app, US-based customer support (though not 24/7), same-day transfers up to $100,000 to/from linked accounts, easy setup.
Pros: High APY, no fees/minimums, reputable backing (Goldman Sachs), fast transfers.
Cons: Online-only, fewer extra features compared to some competitors (e.g., no savings buckets within the HYSA itself, no checking account option).

Credit Union Option (Example: Alliant Credit Union)

APY: Often competitive, though sometimes slightly lower than top online banks (e.g., 3.10% range, check current rate). Requires membership.
Minimum Deposit/Balance: $5 minimum opening deposit (to maintain membership share), need $100 average daily balance to earn dividends (interest).
Fees: No monthly service fee if you opt for eStatements. Potential fees for inactivity or other services.
Features: Strong mobile app, access to large ATM network, supplemental savings accounts possible, often good customer service. Membership open to many (e.g., via donation to partner charity).
Pros: Competitive rates for a credit union, good digital tools, often strong member focus.
Cons: Membership required, minimum balance needed to earn interest, APY might not always match top online-only banks. (Verify membership eligibility and current rates: Alliant Credit Union)

Traditional Bank Option (Example: Capital One 360 Performance Savings™)

APY: Often one of the most competitive among large traditional banks with online presence (e.g., 4.25% – 4.35% range, check current rate).
Minimum Deposit/Balance: $0 to open, no ongoing minimum balance.
Fees: No monthly fees.
Features: Excellent mobile app, online tools, savings goals feature, access to Capital One Cafes and limited branches, large fee-free ATM network. Can easily link with Capital One 360 Checking.
Pros: Competitive APY (for a bank with some physical presence), no fees/minimums, strong digital experience, some branch/Cafe access.
Cons: APY might slightly lag the absolute highest online-only offers at times. Physical branch network is smaller than giant traditional banks.

Comparison table of key features across top accounts

Feature	Online Bank A (e.g., Ally)	Online Bank B (e.g., Marcus)	Credit Union C (e.g., Alliant)	Traditional Bank D (e.g., Capital One 360)
Typical APY Range*	Very High (e.g., 4.25%+)	Very High (e.g., 4.40%+)	Competitive (e.g., 3.10%+)	High (e.g., 4.25%+)
Monthly Fee	$0	$0	$0 (w/ eStatements)	$0
Minimum Deposit	$0	$0	$5 (membership)	$0
Minimum Balance to Earn APY	$0	$0	$100	$0
Mobile App Rating	Excellent	Excellent	Very Good	Excellent
Branch Access	No	No	Limited (Shared Branching)	Limited (Cafes/Branches)

*APYs are illustrative and subject to change. Always check current rates.

Considerations for choosing based on your needs

Best for Highest APY: Often found at online-only banks like Ally or Marcus. Compare current rates diligently.
Best for Large Deposits: Ensure the bank is FDIC/NCUA insured. Consider spreading funds across multiple insured institutions if your total exceeds the $250,000 limit per ownership category.
Best for Frequent Access/ATM Needs: Consider Capital One 360 or an HYSA provider that offers an ATM card or partners with a large fee-free network, possibly requiring a linked checking account.
Best for Digital Tools/Features: Banks like Ally and Capital One often excel with user-friendly apps and features like savings goals.
Best if You Prefer Credit Unions: Look at options like Alliant or PenFed, ensuring you meet membership requirements and comparing their rates/fees. (Explore credit union options via NCUA Credit Union Locator).

Opening a High-Yield Savings Account

Once you’ve compared options and chosen the best HYSA for you, the opening process is usually straightforward, especially with online banks.

Step-by-step guide to opening an HYSA

The exact steps may vary slightly by bank, but the general process is:

Visit the Bank’s Website: Navigate to the page for their high-yield savings account.
Click “Open Account” or “Apply Now”: Start the online application.
Provide Personal Information: You’ll need to enter details like your name, address, date of birth, Social Security number, and contact information.
Verify Your Identity: Banks use various methods, sometimes asking security questions based on your credit history or requiring you to upload identification documents (like a driver’s license).
Review Account Terms and Disclosures: Carefully read the fee schedule, APY details (including variability), and deposit agreement. Agree to the terms.
Fund Your Account: Link an existing external bank account (you’ll need the routing and account numbers) to make an initial electronic transfer. Some banks also allow funding via mobile check deposit or mailing a check.
Set Up Online Access: Create a username and password for online and mobile banking.

For a more detailed walkthrough, see our guide on how to open a savings account, which covers many of these steps in greater detail.

Information needed to open an account

Be prepared to provide the following:

Full legal name
Date of birth
Residential address (not a P.O. Box)
Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN)
Valid government-issued photo ID (e.g., driver’s license, passport) – sometimes required for upload
Email address and phone number
Possibly employment information and income (for regulatory purposes)
Bank account and routing number for the account you’ll use to fund the HYSA

Common challenges and how to overcome them

Identity Verification Issues: If the automated system can’t verify you (common if you have a thin credit file or recently moved), the bank might ask for documentation or require a phone call. Be patient and provide the requested information promptly.
Funding Delays: Initial transfers can take a few business days to process and clear. Don’t be alarmed if the money doesn’t appear instantly.
Linking External Accounts: Sometimes requires micro-deposits (the bank sends two small amounts to your external account, and you verify the amounts) which can add a day or two to the setup.

Tips for funding your new account

Electronic Transfer (ACH): The most common and usually free method. Have your existing bank’s routing and account number ready.
Mobile Check Deposit: If available and you have a check. Be mindful of deposit limits.
Wire Transfer: Faster but usually incurs fees from both sending and receiving banks. Generally not necessary for initial funding unless time-critical.
Mailed Check: Slower option, but available at some banks.

Start with an initial deposit that meets any minimum requirement (if applicable) and begin transferring more funds as desired.

Maximizing Your HYSA Earnings

Opening an HYSA is the first step; actively managing it helps you make the most of the higher interest rates.

Understanding APY changes and market conditions

Remember that HYSA APYs are variable. They tend to move in tandem with the federal funds rate. When the Federal Reserve raises rates to combat inflation, HYSA APYs generally increase. Conversely, when the Fed lowers rates, HYSA APYs tend to fall. Keep an eye on your account’s APY and compare it periodically to ensure it remains competitive. Don’t chase tiny APY differences constantly, but if your bank’s rate falls significantly behind competitors, consider switching.

Strategies for consistent saving

Automate Transfers: Set up recurring automatic transfers from your checking account to your HYSA (e.g., weekly, bi-weekly, monthly). Treat savings like a bill you have to pay.
Save Windfalls: Deposit unexpected income like tax refunds, bonuses, or rebates directly into your HYSA.
“Pay Yourself First”: Allocate a portion of each paycheck to savings before spending on discretionary items.
Use Savings Buckets/Goals: If your bank offers this, visualizing progress towards specific goals can be motivating.

Linking external accounts for easy transfers

Ensure your primary checking account is securely linked to your HYSA. This makes moving money seamless for both deposits and necessary withdrawals. Most banks allow linking multiple external accounts.

Setting up direct deposit

Consider having a portion of your paycheck directly deposited into your HYSA. This automates savings directly from the source, ensuring the money gets saved before you have a chance to spend it.

Avoiding fees that eat into earnings

While HYSAs often have fewer fees, be mindful of potential charges:

Avoid non-network ATM withdrawals if your account comes with an ATM card and charges fees.
Understand fees for services like wire transfers or stop payments before using them.
If your account has a minimum balance requirement to earn interest or avoid fees (less common with top online HYSAs), ensure you maintain it.

Considering laddering strategies (brief mention)

While more commonly associated with CDs, some savers use a “barbell” approach: keeping readily accessible funds in an HYSA and locking up longer-term savings in CDs for potentially higher fixed rates. This balances liquidity with yield but adds complexity.

High-Yield Savings vs. Other Options

HYSAs are excellent tools, but they aren’t the only option. Understanding how they compare helps you decide where to put your money based on your goals and risk tolerance.

HYSA vs. Money Market Accounts (MMAs)

Similarities: Both offer higher interest than traditional savings, are FDIC/NCUA insured, and provide relatively easy access to funds.
Differences: MMAs sometimes come with check-writing privileges or a debit card, offering slightly more checking-like features. Historically, MMAs sometimes required higher minimum balances. APYs are often comparable, but HYSAs have recently tended to offer slightly higher rates at online banks.
Best Use: Both are good for emergency funds and short-term goals. Choose based on the best current APY, fees, minimums, and desired features (like check writing).

HYSA vs. Certificates of Deposit (CDs)

Similarities: Both are safe, insured savings vehicles offered by banks and credit unions.
Differences: CDs require you to lock up your money for a specific term (e.g., 6 months, 1 year, 5 years) in exchange for a fixed APY. Withdrawing money before the term ends usually incurs an early withdrawal penalty. HYSAs offer variable APYs but allow access to funds without penalty. CD rates can sometimes be higher than HYSA rates, especially for longer terms, but not always. (Example: A 1-year CD might offer 5.25% APY when top HYSAs are at 4.50%).
Best Use: HYSAs are better for funds you might need unexpectedly (emergency fund). CDs are better for money you know you won’t need for the duration of the term and want to lock in a specific rate.

HYSA vs. Checking Accounts

Differences: Checking accounts are designed for frequent transactions (paying bills, debit card purchases, checks) and typically earn little to no interest. HYSAs are designed for saving and earn much higher interest but have less convenient transaction features.
Best Use: Use checking for daily expenses and bill payments. Use HYSAs for building savings and earning interest on money you don’t need immediately. Keep only necessary funds in checking.

HYSA vs. Brokerage Accounts/Investing

Differences: Brokerage accounts hold investments like stocks, bonds, and mutual funds. These have the potential for much higher long-term returns but also carry the risk of losing value (including principal). HYSAs offer lower returns but protect your principal (up to insurance limits).
Best Use: HYSAs are for safe, accessible savings (emergency funds, short-term goals). Investing via brokerage accounts is for long-term goals (like retirement) where you can tolerate market fluctuations for the potential of higher growth. Never invest money you might need in the short term or can’t afford to lose. For insights on market trends, resources like The Wall Street Journal’s Market Data can be informative.

When an HYSA is the right choice

An HYSA is likely the best option for:

Emergency Funds: Aim for 3-6 months of essential living expenses. Safety and accessibility are key.
Short-Term Savings Goals: Saving for a down payment on a car, a vacation next year, upcoming home repairs, or property taxes.
Parking Large Sums Temporarily: Holding funds from a home sale before buying another, or keeping cash safe while deciding on long-term investments.
Building Savings Habit: A place to accumulate funds regularly while earning a decent return.

Frequently Asked Questions (FAQ)

How often does interest compound on an HYSA?

Most high-yield savings accounts compound interest on a daily basis. This interest is then typically credited to your account monthly. Daily compounding is advantageous as it means your interest starts earning its own interest slightly faster than monthly or quarterly compounding.

Are there limits on how many withdrawals I can make?

Previously, federal Regulation D limited certain types of withdrawals and transfers from savings accounts (including HYSAs) to six per month. However, this regulation was amended, and the monthly limit is no longer federally mandated. While the federal limit is gone, some banks might still impose their own internal limits or fees for excessive withdrawals. It’s wise to check your specific bank’s policy, but generally, HYSAs offer sufficient flexibility for accessing savings when needed, primarily via electronic transfers.

Can I link my HYSA to my checking account?

Yes, absolutely. Linking your HYSA to an external checking account (at the same or different bank) is standard practice. This is the primary way most people move money into and out of their HYSA via electronic funds transfer (ACH). The setup process usually involves providing the routing and account number of your checking account and potentially verifying micro-deposits.

How do taxes work on HYSA interest?

Interest earned in a high-yield savings account is considered taxable income by the IRS, just like interest from a traditional savings account or CD. Your bank will send you (and the IRS) a Form 1099-INT if you earn $10 or more in interest during the calendar year. You must report this interest income on your federal and potentially state income tax returns.

Is my money safe in an online-only HYSA?

Yes, your money is safe in an online-only HYSA as long as the bank is FDIC-insured (or NCUA-insured if it’s a credit union). The insurance protects your deposits up to $250,000 per depositor, per institution, per ownership category, regardless of whether the bank has physical branches or operates entirely online. Online banks use robust security measures to protect your account information as well.

Key Takeaways

HYSAs offer substantially higher interest rates (APYs) compared to traditional savings accounts, helping your money grow faster.
When comparing the best high-yield savings accounts, focus on APY, minimum deposit/balance requirements, fees, fund accessibility, and online/mobile features.
Online banks frequently provide the most competitive APYs and lowest fees due to lower overhead costs.
Ensure any HYSA you choose is FDIC (banks) or NCUA (credit unions) insured, protecting your deposits up to $250,000. Our banking resources offer more on financial safety.
HYSAs are an excellent choice for storing emergency funds and saving for short-to-medium-term goals where safety and liquidity are priorities.
Opening an account is typically a straightforward online process; learn more about how to open a savings account here.
Maximize earnings by automating savings, avoiding fees, and periodically checking that your APY remains competitive.

Conclusion

Choosing one of the best high-yield savings accounts is a smart financial move that puts your savings to work. By offering significantly better interest rates than traditional accounts while keeping your money safe and accessible, HYSAs provide a powerful tool for reaching your financial objectives sooner. Take the time to compare current offers based on APY, fees, and features that align with your needs. Making informed decisions about where you save your money is a fundamental part of sound financial management and building a secure future.