A high yield savings account could be an excellent place to keep your money, as it can offer great returns for practically no risk.
Unlike many other deposit accounts such as CDs (Certificates of Deposit), in high-interest savings accounts, your money remains accessible and can be withdrawn at any time – while growing at the same time.
So, this type of savings account is ideal, whether you’re saving up for an emergency fund or a down payment on your mortgage.
Understanding what a high yield savings account is and which financial institutions offer the best ones is important when choosing the best account for you –we all have different financial goals and requirements.
Different banks offer different features, so in reality, there is no one best account for everyone.
In this article, we will be looking at some of the highest-interest savings accounts on offer today, along with some of the best features on offer to help you make the right decision for you.
Best High Yield Savings Accounts for October 2021
Here are the top 14 best high yield savings accounts:
- Alliant Credit Union: High-Rate Savings 0.55%
- Ally: Online Savings Account 0.50%
- American Express: Savings Account 0.40%
- Axos Bank: High Yield Savings 0.61%
- Capital One: 360 Performance Savings 0.40%
- CIT Bank: Savings Builder 0.40%
- Fitness Bank: Savings Account 0.55%
- Marcus: Online Savings Account 0.50%
- Popular Direct: Select Savings 0.45%
- Salem Five Direct: eOne Savings 0.40%
- SmartyPig: 0.70%
- Synchrony: High Yield Savings 0.50%
- Varo: Savings Account 3.00%
- Vio Bank: Savings Account 0.51%
1. Alliant Credit Union: High-Rate Savings
Alliant Credit Union is offering a high yield savings account with an APY of 0.55%.
To get this rate, you will need to maintain an average daily balance of $100 or more. Speaking of requirements, the account also has a minimum balance of $5.00 that needs to be met for the account to stay open.
The good thing about Alliant’s rate is that there are no ceilings. This means that you’ll get to enjoy the 0.55% rate, regardless of how much money you accumulate. The account is NCUA insured up to $250,000
There are no maintenance fees to pay as long as you choose the eStatements option. This shouldn’t be a big issue as the credit union offers mobile banking and online banking, making it even more convenient to manage your money.
To make things better, Alliant tops our list of the best credit unions, so you can’t go wrong with this choice.
2. Ally: Online Savings Account
Ally Bank’s Online Savings Account has an APY rate of 0.50%, which is available on all balance tiers.
There are no monthly maintenance fees applicable for this account and no requirements for maintaining a minimum balance, making this account very accessible regardless of your budget.
The account also includes several different features that can help you save money. One such feature is Buckets. This can help you organize your savings according to your financial goals, while recurring transfers can help you make sure that you can save consistently. Other savings boosters include Round-Ups and Surprise Savings – both of which can be set up straight from the account at no extra charge.
Setting up the account is easy and can be done through Ally’s website. The bank also offers 24/7 telephone support, which can prove to be very useful should you have any questions or concerns at any point.
3. American Express: Savings Account
American Express’s high yield savings account offers an APY of 0.40% with no minimum balance requirements and no monthly fees.
Withdrawals are limited to 9 per statement cycle, which runs a full month. The interest is compounded daily and paid out to your account every month, maximizing what you can earn on your account balance.
The bank offers 24/7 customer support, and the account is FDIC insured. You can opt for online statements or have them delivered by post. Other features, such as automatic deposits, make it easy to keep your savings plan on track when using this account.
You can use the savings calculator available on the bank’s website to see how much money you can earn. The calculator even lets you include the optional initial deposit, how long you plan to save for, as well as any monthly and weekly contributions you might make to the account. This can help you plan your finances well in advance to achieve the results you’re after.
4. Axos Bank: High Yield Savings
Axos Bank’s high yield savings offers a rate that’s slightly higher than what most of the competition is offering.
This rate is applicable on all balance tiers, meaning you don’t need to have a specific balance amount to get the full rate. There is a minimum opening deposit requirement of $250 to open the account.
The account carries no monthly fees and no minimum balance requirements. You can also get an ATM card free of charge upon request. Successful referrals will also earn you $20 each, helping you grow your savings even further.
Axos Bank takes security very seriously with its high yield Savings account, including all of the bells and whistles the bank has to offer to keep you safe.
Accounts are monitored regularly for potential fraud with anti-virus and malware protection mechanisms updated. Connections are encrypted, while 2-step authentication can help you make sure only you can access the account.
5. Capital One: 360 Performance Savings
Capital One’s 360 Performance Savings account has an APY of 0.40%, which is applicable to any balance you have in the account.
There are no monthly fees and no minimum balance requirements, so you can save as much as you can without having to settle for a lower rate or a higher fee. The account doesn’t have a minimum opening balance and can be opened online, at one of the bank’s branches, or at a Capital One Cafe.
The account is insured by the FDIC and includes a mobile banking app that can let you do your banking on the go. You can use the app to track your progress, transfer funds, and deposit checks, among other things. You can make up to 6 withdrawals per month from your 360 Performance Savings Account.
You can add as many as ten different people as PoD (Payable on Death) beneficiaries with no access granted while you’re still alive. The only exception worth noting here is that no beneficiaries can be added if the account is set up as a trust account.
6. CIT Bank: Savings Builder
CIT Bank’s Savings Builder account offers a tiered approach to their high yield savings account, ranging from 0.28% to 0.40%.
This means that to get the higher interest rate of 0.40%, you’ll need to meet one of two qualifying criteria – keep a minimum balance of $25,000 or make a monthly deposit of $100 or more. Failure to meet either of these criteria will see the interest rate drop to 0.28%.
You’ll need to deposit a minimum of $100 to open the account. There are no maintenance fees and no fees to open the account. Transactions are limited to 6 every statement cycle.
The account is FDIC insured, and interest is compounded daily to ensure that you earn the maximum amount of interest possible. Transactions are limited to 6 per statement cycle, and the account includes access to the CIT Bank mobile app, which allows you to remotely deposit checks and make transfers from your phone.
7. Fitness Bank: Savings Account
Fitness Bank’s high yield savings account has an APY rate that starts at 0.15% and goes up to 0.55%.
To get higher rates, you do not need to save more money. Instead, you just need to be more active.
Fitness Bank’s app doubles as a step tracker. The more steps you clock in, the higher the APY rate you’ll earn. Clock in 12,500 steps or more, and you’ll earn an APY rate of 0.55%.
Clock in under 5,000 steps and the rate drops down to 0.15%. The Fitness Bank app tracks the number of activities, including walking, running, biking, and swimming. They’re also working on including wheelchair use.
Fitness Bank forms part of Affinity Bank. Their accounts are FDIC-insured. You can open the account online through the bank’s website. There is a $100 minimum deposit amount to open the account. The account also has a maintenance fee of $10 per month, but this will be waived if you keep an average daily balance of $100.
8. Marcus: Online Savings Account
Marcus’ High Yield Online Savings Account offers an APY of 0.50%.
There are no account fees and no minimum deposit requirements making this account very accessible. You can link other bank accounts to send and receive money. Incoming and outgoing transfers of up to $100,000 will be completed on the same day if done by 12 pm ET.
The account is FDIC-insured and can be opened online from the convenience of your home. Just like every other account, you’ll need to provide personal information such as your name, address, and SSN (Social Security Number) to complete the process.
9. Popular Direct: Select Savings
Popular Direct’s Select Savings offers one of the highest APY rates at 0.45% on any balance.
The minimum deposit amount to open this high yield savings is $5,000, and there is an early account closing fee of $25 should you opt to close the account within 180 days of opening.
Interest is compounded daily and paid out monthly. Withdrawals are limited to 6 per statement cycle, withdrawals over and above this amount incurring a $5.00 fee. Your deposits are insured by the FDIC.
10. Salem Five Direct: eOne Savings
Salem Five Direct’s eOne Savings offers an APY of 0.40% on all balances up to $1,000,000.
The account has no monthly fees and no minimum balance requirements, but you’ll need to make a minimum deposit amount of $100 or more to open the account. The account is insured through the FDIC and DIF (Massachusetts Depositors Insurance Fund) to ensure that your entire balance is protected.
The account features a no-commitment policy so that you can freely move money about without restrictions. Other benefits of this account include the ability to deposit checks through mobile banking, free online bill payment facilities, and your first order of checks is free of charge.
While SmartyPig might sound unconventional as far as banks go, their APY of 0.70% puts them firmly as one of the savings accounts with the highest yields.
The 0.70% rate is applicable on balances of up to $10,000, with anything above this earning a slightly lower, but still relatively high, APY rate of 0.45%.
SmaryPig is actually run by Sallie Mae – one of the largest private student loan lenders. There are no maintenance fees, and you can even open multiple saving accounts to cater to different financial goals. Money is insured by the FDIC. Their website also offers tips and tricks to help you improve your financial standing, thanks to Professor Pig and their regular blog posts.
12. Synchrony: Savings Account
Synchrony’s high yield Savings offers an APY of 0.50%, applicable on all balances.
The account comes with an optional ATM card, which lets you withdraw money from an ATM. Synchrony will also refund up to $5.00 per statement cycle for any fees incurred when making withdrawals.
The account can be accessed via Synchrony’s mobile app, installed on phoned and tablets regardless of whether they’re Android or iOS. The app supports mobile check deposit, fingerprint, or face recognition access and even integrates with Siri and Google Assistant.
13. Varo: Savings Account
The Varo Savings Account’s APY is 0.20% to start, but if you meet a series of requirements this APY will increase to 3.00%, making it one of the best high yield savings account rates.
The account can be opened online through the bank’s website or by downloading their smartphone app. There is no minimum balance requirement to open or keep the account, but to get the 3.00% APY you need to have a balance between $1 and $5,000, make 5 debit card transactions, and have at least $1,000 per month direct deposited into your account.
If you also have a Varo bank account, you can use their automatic savings tools to grow your savings without too much effort. From saving a percentage of your pay to using round-ups, Varo makes it easy to save money.
14. Vio Bank: Savings Account
Vio Bank’s High Yield Online Savings Account offers an APY of 0.51%, which rate is applicable on all balances.
There is a $100 opening deposit minimum requirement, but the bank does not charge any monthly fees, so you get to keep all of the money.
Withdrawals are limited to 6 per month, with excess withdrawals charged at $10 each. Vio is a division of MidFirst Bank, which is the institution that insures your money with the FDIC.
What Is A High Yield Savings Account?
High yield savings accounts are savings accounts that earn interest rates that are higher than those offered on a traditional savings account.
Generally speaking, anything around a 0.30% APY rate or higher is considered a high yield.
One other notable feature of a high yield savings account is that the APY rate tends to be applicable for higher balance amounts.
As both brick and mortar and online banks continue to up their game to remain competitive, many banks offer a high APY rate, even on their checking accounts.
In this case, the APY rate tends to be applicable on balances up to a certain amount. In comparison, high-yield saving accounts tend to offer the highest rates on all balances, but it can’t hurt to have a high-yield checking account as well.
How to get the most out of your high yield savings account
High yield Savings accounts offer a relatively high-interest rate on your balance. The more money you save, the more money that interest rate is going to earn you.
One of the best features of APY is compounding interest – the interest you earn will earn you more interest as long as it remains in your account.
Setting up a recurring direct deposit and avoiding unnecessary withdrawals can help you maximize the return you can make with such accounts.
Good budgeting and planning go a long way in helping you make sure that the money you save stays saved and continues to grow.
Regulation D is a regulation by the Federal Reserve Board. It essentially limited savings withdrawals to 6 a month. While this regulation was removed back in April of 2020, some banks have kept the limits it imposed.
It is worth noting that while some banks have kept the six withdrawal limit, others have extended it while several others have removed it altogether.
While the withdrawal limit may seem like a big restriction, a bit of planning can help you stay within limits. This is why budgeting is so very important.
By having such limits in place, you can limit the number of times you dip into your savings. If you find yourself having to access the account too many times, consider opening a checking account.
What Are APY Interest Rates?
APY, which stands for Annual Percentage Yield, is the rate of return that you can expect to make in 1 year. This means that with an APY rate of 0.50%, as a depositor, you’ll earn 0.50% of your investment as interest.
APY also uses what is called compounded interest. When compounded interest is used, you don’t make money at the end of the year. Rather, the interest is worked out constantly throughout the year, and the interest earned up to that point added to your account.
Next time interest is worked out, it will take the entire balance of your account, meaning the money you deposited and the interest earned, so you’ll earn even more money. Of course, the money has to be left in the account for this to work.
What is the industry average?
Many banks quote their APY rate against the industry average, where they will state that the rate they offer is so many times more than the industry average.
Here, banks quote research done by entities such as the FDIC or other private firms about what rates other financial institutions offer. This is why you might come across an APY rate of 0.45% as being 9x the national average and an APY of 0.50% as being 4x the national average.
While big numbers tend to sound impressive, it can be more fruitful to compare the actual rates offered by different banks and credit unions. It’s also important to keep in mind what kind of fees the bank charges and any minimum balance requirements.
Keep in mind that an APY of 0.50% will make $5.01 in a year if you deposit $1,000. This can easily be wiped out with a maintenance fee of $10 per month, so consider everything that the bank is offering.
How Safe Are High Yield Savings Accounts?
Generally speaking, high yield Savings accounts are very safe. To ensure that you’re covered, you’ll need to verify a couple of things.
The first thing that you’ll need to make sure is that the account is insured by the FDIC (Federal Deposit Insurance Corporation) if it’s a bank or the NCUA (National Credit Union Administration) if it’s a credit union.
This insurance protects you against the possibility of losing your money should the financial institution that holds your account go under.
Online banks usually work with traditional banks through which the insurance is offered. This information is always disclosed on the website. In most cases, accounts are insured up to a maximum of $250,000. This means that any amount over and above this threshold is not insured, so be mindful of that.
You’ll also need to make sure that any mobile banking app or online banking website is secure. Most banks will explain what kind of security they implement. On the other hand, making sure that the website is secure is as easy as looking for the padlock icon next to the website’s address in your URL bar.
Frequently Asked Questions
What is a high yield savings account?
High yield savings accounts are savings accounts with higher APY rates than what banks usually offer on a savings account. Generally speaking, savings accounts with an APY of 0.30% or higher are considered high yield.
Can you lose money in a high-yield savings account?
It is next to impossible to lose money in a high-yield account. This is for a few reasons. First, the money is not invested, which means the value of your initial deposit will not go down. Accounts are also insured by the FDIC, usually up to $250,000. This means that should something happen to the financial institution you have the account with, you can get your money back up to the insured amount.
How much interest will I get on $1000 a year in a savings account?
This will largely depend on the effective interest rate applied to your savings and how it is applied. Most banks compound the interest daily and pay it out to the account monthly. Even so, it’s always good to verify that this is actually the case.
This means that if you were to deposit $1,000 in an account with an APY of 0.50% that’s compounded daily, you’d make about $5.00 in a year.
Are high yield savings accounts worth it?
High yield savings accounts offer one of the best ratios between risk and return. While the return might not be as high as you could potentially make by investing the money on the stock or forex market, the risk is also much lower.
The return rate is also higher than you would make on a normal savings account without any extra risk. This makes this type of account ideal to save money, from growing your emergency fund to saving for a down payment on a mortgage.
Which High Yield Savings Account is Best for You?
So, to sum up – a high yield savings account offers much more bang for your buck than your average savings account.
It can help you grow your savings much faster than traditional savings account with less risk than investing in speculative markets such as stocks and foreign exchange. But with many banks and credit unions offering very competitive rates, choosing the right bank for you can be hard work.
While great rates are important, remember there are other things to think about. Account features such as accessibility and service fees can ultimately eat into your savings – so make sure that the bank and account you choose are aligned with your savings goals.
Other features such as account debit cards and credit facilities, the ability to make wire transfers, and how overdrafts are handled are also important and can greatly impact your savings experience.
Always look for accounts that are FDIC or NCUA insured. While it might not be an everyday occurrence for a bank or credit union to go under, it is not unheard of either.
Verify the maximum amount covered by the insurance as this can change from one bank to another. Remember that anything over and above the insured amount is ultimately at risk and might be better off invested elsewhere.
Remember that even a high yield APY rate probably won’t earn you enough money to quit your job. The important thing is to use your new account wisely.
Savers would do well to leave the money in their savings account to continue to grow and accumulate interest over time. The highest savings account rates will not earn you enough money unless there is money to earn interest.