Do Banks Offer 6% Interest on Savings Accounts?

According to the FDIC, national deposit rates are 0.42%, but plenty of banks pay higher rates. If you only earn 0.42% interest on your deposits, reaching your financial goals will take a long time. But if you find a bank that pays as much as 6% interest on savings accounts, you’ll reach your goals much faster.

The real question is, do banks actually offer 6% interest on savings accounts? Yes, there are savings accounts paying out 6%+, but here’s what you need to consider before you open an account.

Best 6% Interest Savings Accounts

You have a few options if you’re looking for 6% interest savings accounts, but they typically have important fine print and restrictions to follow.

  1. Digital Federal Credit Union: 6.17% up to $1,000
  2. Mango Money: 6% up to $2,500

1. Digital Federal Credit Union: 6.17% APY up to $1,000

Digital Federal Credit Union has over 1 million members, 5,900 co-op branches, and 80,000+ fee-free ATMs. Anyone can become a member if they live in a community, work for a company, or are part of an organization on DCU’s list.

The DCU Primary Savings account pays up to 6.17% APY, but there is some fine print to understand.

To open an account, you must deposit $5. There’s no minimum monthly balance and no fees.

You earn 6.17% on the first $1,000 deposited. On any remaining balance over $1,000, you’ll only earn 0.16%. For this reason, we recommend utilizing a slightly lower 5.00% APY, but on your entire account balance.

While this may offer may sound great, there are other great credit unions offering high APYs on savings accounts with fewer restrictions that are more beneficial for your savings.

2. Mango Money

Mango Money pays up to 6% APY on the Mango Savings account. To start, you must open a Mango Card, a prepaid debit card. You don’t need a credit check, and there’s no activation fee; plus, all cardholders can open a savings account with a $25 deposit.

You can earn up to 6% APY on balances of $25 to $2,500. On any remaining balance over $2,500, you’ll earn 0.10%.

To qualify for the 6% APY, you must have a balance of at least $25 and make Signature Purchases of $1,500 or more using your Mango Card. If you don’t make $1,500 in purchases, Mango Money offers a fallback rate of 2% for purchases of $750 to $1,499.

You can have up to six monthly transfers out of your savings account and enroll in direct deposit to guarantee you save each month.

Are 6% Interest Savings Accounts Worth It?

High-yield savings accounts have many restrictions, and sometimes you have to ask yourself if it’s worth it.

If there are a lot of hoops to jump through or lower interest rates earned after you hit a certain amount, it’s often not worth it just to say you’re earning, say, 6% APY.

In reality, you only earn 6% on a small portion of your deposits, and the remaining funds earn much less.

Sometimes it’s better to stick to the lower-paying banks because you’ll earn more interest. This is because the ‘lower APY’ is typically higher than the default APY high-yield banks pay.

For example, after $500 at Landmark CU, your balance earns 0.11%. You’d earn much more interest by depositing your funds in a bank account that consistently pays 1.25% to 3% on all balances.

Not only do you lose money on the higher balances and the lower APY, but there are many restrictions these accounts have. For example, they include minimum opening balance requirements, limited transactions, or a certain amount of purchases you must make to earn the interest.

Keeping track of the requirements and meeting them often isn’t worth the few dollars you’ll earn in interest on a portion of your balance.

Fortunately, many online high-yield savings accounts don’t require a minimum balance, charge fees, or have tiered interest rates. Instead, they pay a fixed interest rate on all balances.

What to Look For in a Savings Account

As you look for a high-yield savings account, it’s important to know what to look for in them. Of course, no two accounts will be the same, but here are the most important considerations.

Minimum Deposit

Most online high-yield savings accounts don’t require a minimum deposit but always check. The few that do typically require $25 or less to open an account. Of course, to earn more interest, it makes sense to have a higher balance.

Ensure you meet the minimum deposit requirements to earn the bank’s highest APY.

Minimum Balance

Some online high-yield banks require a minimum balance to keep the account open and earn interest. Read the fine print to learn what they require and ensure you can meet it. Also, ask how they determine your balance; is it an average daily or monthly balance?

If it’s an average daily balance, your balance must never be lower than their requirement, which can be hard shoes to fill. However, if it’s an average monthly balance, you just need to maintain an average of the balance required.

Monthly Fees

Most online banks don’t charge monthly fees but don’t assume. However, monthly maintenance fees can be as much as $10 to $20, so it’s worth asking if a bank charges them.

If they do, ask if there are ways to waive the fees. For example, most banks allow you to waive the fees if you meet their minimum threshold or other requirements, such as a certain amount of direct deposits or spending.

Mobile and Online Banking

Online banks must provide mobile and online banking, but what features do they offer? For example, look for mobile check depositing features if you will deposit checks. Also, if you want to link an external account for transfers, make sure it’s possible.

Play around with their online banking platform and make sure it’s something you’re comfortable with since all your banking transactions must take place online or on the app.

Insured by FDIC or NCUA

Never deposit money in a bank that’s not FDIC or NCUA insured. This guarantees that you won’t lose your funds if the bank or credit union goes out of business.

Frequently Asked Questions

Want to learn more? Check out my list of frequently asked questions.

What does “APY” mean?

APY stands for Annual Percentage Yield. It refers to the real rate of return given compound interest.

Which bank provides the highest interest-rate savings account?

Digital Federal Credit Union offers the highest APY on a savings account at 6.17%. But, there is fine print that comes with that high APY, including the fact that you only earn the higher interest rate on the first $1,000 deposited; the remaining funds earn a much lower rate.

Do you pay taxes on a 6% interest savings account?

You pay taxes on any money you earn, or at least you should claim the money earned and see if you owe taxes. You might be able to offset the taxes with other losses, but always leave that up to your tax advisor by disclosing all money earned, no matter how little.

How often do savings rates change?

Savings rates can change frequently, but typically they change monthly, quarterly, or semi-annually. They change most often when there’s a change in the economy or when the Fed makes changes to the Fed rate.

Is it possible to lose money from a 6% interest savings account?

You won’t lose money from an HYSA unless you put money in a bank that isn’t FDIC-insured. But, then, if that bank were to go out of business, you’d lose your money. Otherwise, your money is about as secure as it gets in a high-yield savings account.

Are cryptocurrency savings accounts a safe option?

While you can earn 6-10% on crypto savings accounts, they aren’t the safest option. While they’re called savings accounts, you loan your crypto to those who need it and earn interest. As you can imagine, this creates a large amount of risk, and there’s no FDIC or any other insurance to protect you.

Transferring crypto also requires fees, similar to what you’d pay in ATM or ACH fees, which decrease your earnings.

The Bottom Line

Banks offer 6% APYs, but rarely on the entire balance. When evaluating a bank’s interest rate, there are multiple factors to consider, so don’t be quick to jump at the highest percentage you see. An account with fewer restrictions may be worth it.

Even though you’ll earn a lower APY, you’ll earn more interest in the end.