The best high-yield savings accounts January 2024

Posted by

High-yield savings accounts have proliferated in recent years amid a rise in online banks and fintechs competing for business against traditional banks, giving consumers a wide range of choices to grow their savings in a hurry.

High-yield savings accounts can offer better interest rates than regular savings accounts — in some cases more than 10 times the current average annual percentage yield (APY) of 0.46%. With that kind of return, it pays to scout out the best high-yield savings accounts to ensure you’re not leaving money on the table.

Methodology



Our team of experts analyzed hundreds of data points and then used data-driven methodology and thorough fact-checking to come up with the best high-yield savings accounts. We heavily emphasized APY because maximizing earnings is the most important feature of high-yield savings accounts. You can read more about our methodology below.

Why is now a good time to open a high-yield savings account?

  • Earn interest: The best high-yield savings accounts offer an APY of more than 5.00% right now, which will allow your savings to grow quickly. For example, if you deposit $10,000 into an account that earns 5.00% APY and compounds monthly, you’ll have $11,049.41 in two years if the APY stays the same. Getting a high-yield savings account now means you can lock in your rate before the expected rate drops later this year.
  • Keep your money safe: As long as your financial institution is insured by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA), your funds will be safe, even in the event of a bank collapse.
  • Flexible access: While many high-yield savings accounts limit the number of withdrawals you can make per month, your savings are still much more liquid than a certificate of deposit (CD) or investing in the stock market, for example.

UFB Direct High Yield Savings

Best for customer ratings

UFB Direct High Yield Savings

Why we picked it

UFB Direct is an online bank owned by Axos Bank, which means it has a large, FDIC-insured financial institution behind it. The UFB Direct High Yield Savings Account offers an APY of 5.25% across all balance tiers. It also scored high customer ratings from Trustpilot, Google app and Apple app, though it does only have one physical branch.

Pros

  • No monthly maintenance fees
  • No minimum deposit required
  • FDIC-insured

Cons

  • No in-person banking
  • Small lineup of bank products and services
  • No UFB Direct checking account to link to

Who should use it

UFB Direct is a good option if you want one of the highest savings-account APYs in the industry and are comfortable with online banking.

Varo Savings Account

Varo Savings Account

Why we picked it

Varo is a digital-only bank with more than 3 million customers that boasts one of the best high-yield savings account rates in the business. Its Varo Savings Account offers an APY of 5.00% on balances of up to $5,000 and 3.00% APY on the rest. You’ll have to set up direct deposits of at least $1,000 monthly to get the highest interest rate. Customers also have access to the Varo Believe card, a secured charge card designed to help you raise your credit score. You may also qualify for quick cash advances of up to $250 (Varo charges a sliding flat fee depending on how much you borrow.)

Pros

  • No monthly maintenance fee
  • FDIC-insured
  • High overall rating from customers

Cons

  • The 5.00% rate cuts off at $5,000 and then drops to 3.00%
  • Must meet several requirements to earn the 5.00% rate, including a direct deposit of at least $1,000 each month
  • Limited number of other products and services

Who should use it

If you have up to a few thousand dollars to save and you want a high APY. Varo seems tailored to younger bank customers who enjoy the digital banking experience, want a high APY and need to build their credit scores.

Laurel Road High Yield Savings® account

Best for full banking experience

Laurel Road High Yield Savings® account

Why we picked it

Laurel Road is an FDIC-insured digital banking platform owned by KeyBank, which acquired the brand in 2019. Because Laurel Road is affiliated with a larger banking company, it has financial might at its disposal that some online banks lack. It also has a wider lineup of products, including a checking account, credit card and loans. The Laurel Road High Yield Savings Account offers a 5.00% APY on all balances — interest compounds daily and is paid out monthly.

Pros

  • Top APY is available on all balances
  • No monthly service fee
  • FDIC-insured

Cons

  • Opening deposit could be limited to $500,000 per account
  • No branch service
  • Some fees might apply for certain transfers and withdrawals

Who should use it

Laurel Road is a good option for consumers who want a full banking experience to go with their high-yield savings account.

Why we picked it

Popular Direct is another digital banking brand of a larger company — in its case, Popular Bank, the US banking subsidiary of publicly traded Popular, Inc. — meaning it has the financial backing of a major financial firm. The Popular Direct High-yield Savings Account offers a 5.40% APY, which ranks it among the best in the industry. It’s worth noting that it does require a $100 minimum deposit to open an account.

Pros

  • One of the top APYs in the industry
  • No monthly maintenance fee
  • FDIC-insured

Cons

  • $100 minimum to open
  • $25 early account closing fee (within 180 days)
  • Low ratings on Google Play and Apple App Store

Who should use it

This account is all about the high APY on all balances, making it a good choice if you want to build your savings in a hurry. Popular Direct also offers high-yield CDs.

Bask Bank Interest Savings Account

Best for no minimum deposit

Bask Bank Interest Savings Account

Why we picked it

Bask Bank has a long history with digital banking, laying claim to being the first online-only savings bank in the US when it launched through Texas Capital Bank in 1999. The Bask Bank Interest Savings Account offers a 5.10% APY and is FDIC-insured. Customers also have access to a mileage savings account and CDs that can be linked, however, there is no checking account option.

Pros

  • No monthly service fees
  • FDIC-insured
  • Access to other savings products

Cons

  • No checking option
  • No in-person service
  • So-so reviews on Trustpilot, Google Play and Apple App Store

Who should use it

Bask Bank is a good choice for consumers who prefer digital banking and want a wider range of savings options than those offered by other online banks.

TAB Bank High Yield Savings

Best for range of products

TAB Bank High Yield Savings

Why we picked it

TAB Bank is an online bank that started operations in 1998 as Transportation Alliance Bank. Today it offers a full suite of products and services for consumers and businesses, including checking and savings accounts, insurance and loans. Its high-yield savings account offers a 5.27% APY on all balances with no minimum deposit to open and no monthly service fees, though there is no in-person banking option.

Pros

  • No monthly service fee
  • No minimum deposit to open the account, though you do need to have at least $0.01 in the account to get the APY
  • FDIC-insured

Cons

  • No in-person banking
  • Certain transactional and other fees could lower returns on the account
  • Limited customer service hours

Who should use it

TAB Bank’s high APY should appeal to customers who want a good return on their money along with access to other products not found at many online-only banks.

First Foundation Online Savings Account

First Foundation Online Savings Account

Why we picked it

First Foundation is a full-service bank with a wide lineup of personal and business accounts, about $13 billion in bank assets and 31 branch locations scattered among five states: California, Florida, Hawaii, Nevada and Texas. This sets it apart from the online-only banks on this list. The First Foundation Online Savings Account offers a 5.00% APY and is FDIC-insured, though you do need to deposit a minimum of $1,000 to open an account.

Pros

  • No monthly service fees
  • FDIC-insured
  • Access to branch banking and other products and services

Cons

  • Minimum deposit of $1,000 to open
  • High APY can’t be combined with other offers
  • Lower rating on Google Play than other banks

Who should use it

Although consumers nationally can sign up for First Foundation’s online savings account, it’s an especially good choice if you live in its branch service area and want access to in-person banking.

Salem Five Direct eOne Savings

Salem Five Direct eOne Savings

Why we picked it

Salem Five Direct is a digital banking unit of Salem Five, a financial services company that offers a full lineup of banking, loan, insurance, investment and wealth management services. The Salem Five Direct eOne Savings account offers a 5.01% APY on all balances up to $1 million and also gives you access to the bank’s many other products, though you need to deposit at least $10 to open an account.

Pros

  • High APY on up to $1 million
  • No minimum balance and no monthly fees
  • FDIC-insured

Cons

  • $10 deposit required to open
  • Balances over $1 million might be switched to an account with an APY of only .01%
  • Account limited to consumers who apply online and don’t have an existing checking or savings account with Salem Five Bank

Who should use it

Salem Five has more than 25 branches in Massachusetts, so the Salem Five Direct eOne Savings account is ideal for people in its service area. It’s also a good choice if you value a full-service banking experience.

Synchrony Bank High Yield Savings

Synchrony Bank High Yield Savings

Why we picked it

Synchrony Bank is one of the bigger and better-known online banks. It’s owned by Synchrony, a Fortune 500 company that’s been around for more than 80 years, so there’s a strong and established company behind the account. Synchrony gets decent marks on its Google app (4.6) and iOS app (4.8) and its high-yield savings account offers an APY of 4.75%, which is somewhat lower than other banks on this list.

Pros

  • No monthly fees
  • No minimum deposit or balance requirements
  • FDIC-insured

Cons

  • APY is lower than most other banks on this list
  • Low Trustpilot rating
  • No in-person banking

Who should use it

This account works well if you already have a relationship with Synchrony and want a competitive APY to go along with the other services.

Betterment Cash Reserve

Betterment Cash Reserve

Why we picked it

Betterment is perhaps best known as a digital investment company with a lineup that includes IRAs, 401(k)s, crypto investing and socially responsible investing. Its banking products include a checking account and high-yield Cash Reserve account. The Cash Reserve account’s base variable rate is 4.75%, but Betterment also has a promotion offering an extra 0.75% APY for the rest of the year when you open your first account, pushing the APY to 5.50%. The promotional rate is subject to a qualifying deposit.

Pros

  • No monthly service fees
  • FDIC insurance up to $2 million with Betterment’s program banks
  • The promotional offer temporarily kicks APY up to 5.50%

Cons

  • No in-person service
  • Low rating on Trustpilot
  • $10 minimum deposit requirement

Who should use it

This is a good option if you need investment services and also want access to a high-yield savings account. As with most accounts on this list, you should be comfortable with digital banking.

Our picks at a glance

What are high-yield savings accounts?

They’re savings accounts that give you much better-than-average interest rates on your money, resulting in high APYs. It’s worth noting that there are no meaningful differences between a savings account and a high-yield savings account, so you should look at the account names interchangeably when comparing APYs.

As of January 2024, the average APY for all types of US savings accounts was 0.47%, according to the FDIC. However several high-yield savings accounts offered rates of 5.00% and higher. Many of the best rates are offered by online-only banks because they have much lower operating costs than traditional, brick-and-mortar banks, allowing them to offer high APYs to attract customers.

Why should you consider high-yield savings accounts?

High-yield savings accounts are a great place to put money that you want to grow quickly but also can access anytime. While regular savings accounts are easy to access, they generally don’t earn as much as high-yield savings accounts. You can get a better return on your money than you would with other types of deposit accounts, allowing you to grow your wealth a lot faster.

High-yield savings accounts are also worth considering if you are saving toward a specific goal such as an emergency fund or down payment on a new home. You not only earn high interest — you also have a single, convenient place to add to your savings.

Keep in mind that high-yield savings account interest rates fluctuate based on market conditions. Take advantage of these high rates before they drop, which might happen later this year.

What to consider when choosing a high-yield savings account

The same basic rules apply to choosing a high-yield savings account that apply to any other bank account: It all comes down to your financial goals. Here are a few things to consider:

  • Interest rate: You want to look not only at the rate currently being offered but also how long it lasts. In some cases what you see on a bank’s website is a promotional rate that might expire after six months or so, then drop down to a lower rate.
  • Initial deposit: Some banks require a deposit to open a high-yield checking account. These often range from $5 to $100, but some accounts have much higher minimum deposits.
  • Minimum balance: Read the fine print to learn the minimum balance to avoid service fees.
  • Fees: Many high-yield savings accounts have no fees, but some do. Make sure you know the fee structure before opening an account. If an account has a monthly maintenance fee, you can expect it to range from $5 to $20.
  • Compounding interest: Before opening the account, find out whether interest is compounded daily, monthly or yearly. This can make a big difference in how quickly you grow your money.

Online bank vs. traditional bank high-yield savings accounts

The main difference between online banks and traditional banks is that with the former, all of your business is conducted digitally, either on a website or app. With most traditional banks, you have the choice of banking online or in person at a branch. Some online banks are stand-alone startups with little more than a digital platform and a single account, while others are digital subsidiaries of larger banking companies.

Because online banks don’t have to invest large sums of money in labor, real estate or physical operations, they can afford to offer higher interest rates and lower fees than traditional banks. The downside is that you might not find as many products at online banks and you don’t have the option of in-person service.

Traditional banks are convenient and much easier to move money around, especially if you open a savings account where you also have your main checking account. But you risk losing out on earning more money.

The one thing you want to make sure of when considering an online bank is whether it is insured by the FDIC. The FDIC covers most online banks but it’s important to check before opening an account, which you can do with the FDIC’s BankFind tool.

Pros and cons of high-yield savings accounts

No bank account offers everything, and that’s the case with high-yield savings accounts as well. Here’s a look at some of their strengths and weaknesses:

Pros

  • High APYs compared to other types of deposit accounts
  • Low fees (at least with online-only banks)
  • High returns without high risks

Cons

  • APY can change at any time, notably when the Fed makes interest rate adjustments
  • Stricter requirements than traditional savings accounts at some banks
  • High opening deposit and/or minimum balance requirements for some accounts
  • Not ideal for daily banking, especially since many high-yield savings accounts are stand-alone and can’t be bundled with a checking account

Maximizing your high-yield savings account

To get the most out of your high-yield savings account, the first thing you want to do is ensure the rate is competitive with the best in the industry. This will require comparing different accounts at different banks. Next, double-check the fine print regarding how long the rate lasts, what the minimum deposit and balance requirements are, how often interest is compounded and whether your deposits are FDIC-insured.

When it comes to fees, you want to make sure you pay as little as possible. Here are some different fees to keep an eye on:

  • Monthly service fees that kick in if you don’t meet minimum balance or other requirements.
  • Inactivity fees for not making any deposits or withdrawals over a certain period.
  • ATM fees for using machines outside of the bank’s network.
  • Excessive withdrawal fees if the bank limits your savings account withdrawals per month.

How to open a high-yield savings account

The specific process of opening a high-yield savings account depends on the account and the bank. You can usually find the requirements and instructions on the app or website. Here’s what most banks require when opening a new account:

  • Proof of ID: You’ll need to provide some kind of documentation establishing your identity, such as a driver’s license or government-issued ID, Social Security number, ITIN or bill with your name and address on it. If you apply in person at a branch you can bring your documents with you. If applying online, you’ll be asked to provide the information digitally.
  • Application: This varies from one bank to the next, but you typically have to provide information such as your full name, address and Social Security number or ITIN. Some applications can be approved immediately while others might take a few days.
  • Opening deposit: This almost always involves transferring money into the new high-yield savings account from another account. However, if you open an account at a traditional bank branch, you might be able to make the opening deposit in cash.

In most cases, you’ll have the option of choosing how to receive account statements, set up account alerts and automatic deposits and link your high-yield savings account to other accounts.

Alternatives to high-yield savings accounts

The purpose of high-yield savings accounts is to give you the biggest return possible with a savings account, but it’s not always the best option. For example, when the Federal Reserve raises interest rates (like it did in 2022 and 2023) you can get bond yields that are competitive with the best high-yield savings accounts — with the bonus of having the rates locked in for a set period.

Similarly, some money market accounts offer rates that are competitive with high-yield savings accounts while also letting you write checks. This is also the case with certain high-yield checking accounts.

CDs are a good alternative to high-yield savings accounts. They’re best for folks who have a large lump-sum deposit and want to lock in a rate before the Fed makes changes to the interest rate. Once you’ve got your CD rate, it can stay that way until the terms are up. This might be a better option if you don’t want to lose out on optimal yields this year.

Methodology

CNN Underscored Money analyzed 65 savings accounts from 54 financial institutions to come up with the rankings for the best high-yield savings accounts. This included accounts from a mix of traditional banks, online banks and credit unions that are available nationally. We ranked each account on nine data points across six categories.

Here are the categories we analyzed and how we weighted each:

APY (70%)

The amount of interest you earn on your savings is the most important part of choosing a high-yield savings account for many consumers, so we weighted this highest of any factor.

Fees (10%)

Fees are a critical factor to consider with your high-yield savings account because they can eat away at any interest earnings, especially if an account has a high monthly maintenance fee.

Customer experience (5%)

While you’ll likely deal with your bank less often with a high-yield savings account than you will with a checking account, it’s still important to have a bank that’s trustworthy and easy to reach when you need help.

Digital experience (5%)

You’ll want a bank with a usable app and plenty of online features so that it’s easy to bank from anywhere.

Minimum deposit requirement (5%)

A high minimum deposit makes a savings account less accessible, so we rewarded accounts that more people can use.

Minimum balance to avoid a monthly fee (5%)

A high minimum balance to avoid monthly fees limits flexibility with your savings account because you’re limited in how much you can transfer or use for unexpected expenses without being penalized by fees.

We also considered several other factors like welcome bonuses and tier structures to earn APY.

Frequently asked questions (FAQs)

One difference is that high-yield savings accounts can pay higher interest rates than regular savings accounts, but this isn’t always true and the two accounts are very similar. You might also see lower fees at high-yield savings accounts offered by online banks.

As long as the account is offered by an FDIC member institution, it protects your money like any other FDIC-insured account. This means your savings are insured up to $250,000 per depositor, per insured bank, for each account ownership category. If your high-yield savings account is offered by a credit union, your money is insured for up to $250,000 per depositor by the NCUA.

Under the federal government’s Regulation D, all savings accounts let you withdraw or transfer money up to six times a month without paying any fees. Although this regulation was indefinitely suspended during the Covid-19 pandemic, many banks still impose the six-withdrawal limit.

Some banks might charge a fee if you close a savings account soon after opening it, but it’s up to the individual bank. There is no specific industry regulation imposing penalties for closing a high-yield savings account.