The Best High-Yield Savings Accounts for January 2025
With savings account interest rates gaining steam over the past several months and the best accounts offering rates 12 times higher than the national average, now is the best time to shop around and make sure you’re earning a good rate on your savings.
Switch to a high-yield savings account and earn even more on your high-balance savings.
Where to Find the Best High-Yield Savings Accounts
After years of research, MoneyRates has observed that a specific group of banks consistently offers the highest savings rates. Spending a little time shopping for a better rate now, particularly at one of these banks, could pay off for years.
What Is a High Yield Savings Account?
A high-yield savings account has the same characteristics as an ordinary savings account but with one key advantage: the interest rate is significantly higher.
High-yield savings accounts at FDIC-insured banks also have federally insured principal and interest. This insurance covers up to $250,000 per depositor at each participating institution.
How big a difference is there between a high-yield savings account and the average savings account?
The FDIC reports the national savings account rate is around 045.%. In contrast, the best high-yield savings accounts pay 10, 12, or 15 times higher APYs than the national average.
10 Best High Yield Savings Accounts Details
There are many banks out there offering high yields on their savings accounts. These are the ones that come out on top.
1. Western Alliance Bank
As a relative newcomer to our top-10 list, Western Alliance Bank is pulling out all the stops, with one of the highest savings rates, no fees, and a minimum deposit of only $1 to get started. It’s FDIC-insured, and customers can get help 24 hours a day, seven days a week.
MINIMUM OPENING DEPOSIT: $1
MINIMUM TO EARN APY: $1
ACCOUNT FEATURES: No fees, multifactor identification to keep your information and money safe, open an account in five minutes.
Read Review: Western Alliance High Yield Savings Account
2. SFGI Direct Savings Account
SFGI Direct is a division of Summit Community Bank based in Moorefield, West Virginia. It was founded in 1995. Summit Community Bank currently has over $2.4 billion in deposits.
MINIMUM OPENING DEPOSIT: $500
MINIMUM TO EARN APY: $1
ACCOUNT FEATURES: No monthly maintenance fee and 24/7 online access.
Read Review: SFGI Direct Savings Account
3. Axos Bank High Yield Savings
Axos Bank was established in 2000 and is headquartered in La Jolla, California. It currently has more than $11 billion in deposits.
MINIMUM OPENING DEPOSIT: $250
MINIMUM TO EARN APY: $0.01
ACCOUNT FEATURES: Online/mobile access and tools. Free ATM card upon request.
Read Axos Bank Reviews: Savings, Money Markets and CDs
4. Synchrony Bank High Yield Savings
Synchrony Bank was founded in Draper, Utah, in 1988. It has over $66 billion in deposits.
MINIMUM OPENING DEPOSIT: None
MINIMUM TO EARN APY: $0.01
ACCOUNT FEATURES: No minimum balance or monthly service fees.
Read Review: Synchrony High Yield Savings
5. American Express® High Yield Savings Account
American Express National Bank, a member of the FDIC, was established in 1989 in Sandy, Utah. Deposits are more than $84 billion.
MINIMUM OPENING DEPOSIT: $0
MINIMUM TO EARN APY: $0
ACCOUNT FEATURES: Online access plus 24/7 phone support.
Read Review: American Express High Yield Savings Account
6. Ally Bank Online Savings Account
Ally Bank was established in 2004. It is based in Sandy, Utah, and has more than $130 billion in deposits.
MINIMUM OPENING DEPOSIT: $0
MINIMUM TO EARN APY: $0.01
ACCOUNT FEATURES: Online account access plus savings/budgeting organizing tool.
Read Review: Ally Online Savings Account
7. Marcus by Goldman Sachs Online Savings Account
Marcus is the retail brand of Goldman Sachs Bank, based in New York City and founded in 1990. Goldman Sachs Bank has over $220 billion in deposits.
MINIMUM OPENING DEPOSIT: None
MINIMUM TO EARN APY: $0.01
ACCOUNT FEATURES: No monthly service fee. $1 million account maximum balance.
Read Review: Marcus Online Savings Account
8. Discover Bank Online Savings Account
Discover Bank dates back to 1911. It is headquartered in Greenwood, Delaware, with over $80 billion in deposits.
MINIMUM OPENING DEPOSIT: None
MINIMUM TO EARN APY: $0.01
ACCOUNT FEATURES: Online access with no monthly service fee.
Read Review: Discover Bank 2021 Review: Savings, Money Markets and CDs
9. Sallie Mae Bank High-Yield Savings Account
Sallie Mae Bank was founded in 2005 and is based in Salt Lake City, Utah. It has more than $23 billion in deposits.
MINIMUM OPENING DEPOSIT: None
MINIMUM TO EARN APY: $0.01
ACCOUNT FEATURES: Online access and no monthly service fees.
Read Review: Sallie Mae High-Yield Savings Account
10. Barclays Online Savings
Barclays is an online bank based in Wilmington, Delaware, established in 2001. It has over $25 billion in customer deposits.
MINIMUM OPENING DEPOSIT: None
MINIMUM TO EARN APY: $0.01
ACCOUNT FEATURES: No monthly service fee, and a goal-based Savings Assistant tool available online.
Read Review: Barclays Online Savings Account
High Yield Savings Accounts Pros and Cons
Shopping for the best high-interest savings accounts can pay off.
To make the most of the money you have to invest, you should first ask whether a savings account is the right vehicle to achieve your savings goals.
The most important thing to know about savings accounts is that they are safe and liquid.
Pros
- Savings accounts are safe. Since the money you put on deposit is guaranteed by FDIC insurance, your principal is safe up to the legal limit of $250,000 per depositor or $500,000 for joint accounts.
- Savings accounts are liquid. Your money is always available immediately, on demand. There may be limits on the number of withdrawals you can make monthly, but you are entitled to take out any or all of the account whenever you want.
Cons
- Savings accounts offer relatively low returns compared to other investments.
- Unlike CDs, the interest rate on a savings account is subject to change at any time.
Best Uses for High-Yield Savings Accounts
Here are just a few examples of good ways to use a high-yield savings account:
1. Budgeting
Checking accounts are designed for frequent access, and this can make it too easy to overspend if all of your pay is held in a checking account. A simple budgeting technique is to deposit your income to a savings account instead and then only transfer a budgeted spending amount to checking.
2. Emergency Fund
Having money set aside for as much as six months’ worth of significant expenses can save you from getting into debt when an emergency arises. A high-yield savings account is an excellent place to keep that emergency fund because it would allow immediate access when a need arises while paying you interest.
3. Saving for a Major Purchase
If you’re saving bit by bit for a major purchase, a savings account is a good option because it allows you to add savings anytime. Also, the interest you earn will kick in a little bit toward your planned purchase.
4. Saving for a Down Payment on a House
Saving money for a down payment on a house requires you to accumulate a relatively large amount of money yet have access to that money at any time in case the right opportunity comes along. Savings accounts are well-suited to that job.
5. Vacation Fund
Want true peace of mind when you go on vacation? Save up for it in advance rather than putting the cost on your credit card and facing the debt when you come home. A savings account allows you to put aside money toward your vacation throughout the year and access it when correct.
Are High Yield Savings Accounts Safe?
Various financial products advertise as “high yield,” but most are not as safe as high-yield savings accounts offered through FDIC-insured banks.
Since FDIC insurance began on January 1, 1934, no insured deposits have been lost due to bank failures. Today, the FDIC insures deposits for up to $250,000 per depositor per bank.
The FDIC insures all of the banks listed in this study. To research whether the FDIC covers a bank, you can use the BankFind tool on the FDIC website.
What to Consider When Choosing a High-Yield Savings Account
Here are some things to check out when comparing high-yield savings accounts:
Annual Percentage Yield (APY)
This is the current interest rate paid on the account, compounded for one year.
Some banks pay different rates depending on your balance, so compare rates that apply to the amount you intend to deposit.
How Often Rates Change
Interest rates on savings accounts are subject to change at any time. This means the rate you sign up for may not be the rate you get over the year ahead.
However, while rates on savings accounts can change frequently, the banks offering the best rates tend to stay near the head of the pack even as rates go up and down. That’s why it is still worthwhile to compare rates when choosing a savings account.
Monthly Service Fee
Some savings accounts charge a monthly service fee regardless of how you use the account. In today’s low-interest rate environment, this fee can easily wipe out the interest you earn.
Fortunately, plenty of savings accounts still do not charge a monthly fee. Be sure to choose one of the ones that don’t.
Minimum Deposit Required
Some banks will not let you start an account unless you deposit at least a specified amount. When considering savings accounts, focus on those with no minimum account requirement or one you can afford to meet.
Minimum Balance Required
A minimum balance requirement is different from a minimum deposit requirement. It is not just the amount you need to open an account but an ongoing requirement.
An account often requires you to maintain a certain minimum balance for your money to earn interest or earn interest at the advertised level. So, it would be best if you only considered charges with minimum balance requirements you can quickly meet continuingly.
Transfer Options
Traditionally, money transfers from savings accounts to third parties were limited to six per month. In 2020, the Federal Reserve loosened that regulatory requirement. However, some banks may still limit the number of transfers you can make and charge a fee if you exceed their limit.
Depending on how you plan to use your savings, you may be wise to check for any transfer limits before selecting an account.
Also, some accounts offer features like debit cards and the ability to link to other accounts, making it easier to access your money.
How to Choose the Best High-Yield Savings Account
Would you like to earn more interest on your savings? Here are six tips to help you do that:
1. Look for Online Savings Accounts
Online savings accounts can help you earn a better interest rate in two ways:
- They increase the number of choices available to you
- Online savings accounts generally offer higher rates than traditional, branch-based accounts.
The extra choice is essential because most banks are local or regional. In the past, the banking products you had access to depended very much on where you lived. Now, you can access best-in-class interest rates via online savings accounts and CDs no matter where you live in the U.S.
This is especially important given the size of online savings accounts’ rate advantage over branch-based versions.
The latest MoneyRates America’s Best Rates survey found that the average online savings account offered an interest rate nearly ten times that of the average branch-based performance.
All ten of the best high-interest savings accounts listed above are online accounts.
2. Go Small to Earn Big
When you consider banking options, look beyond massive institutions with household names. They might have events and stadiums named after them, but these companies tend to offer the lowest savings account rates.
“Four banks offer retail savings accounts with over a trillion dollars in customer deposits. As of the most recent America’s Best Rates study, each bank offered a savings account rate less than a third of the average rate and less than a tenth of any of the top ten rates.”
When you compare these numbers, it’s easy to see why it pays to look beyond the mega-banks if you want a high-interest savings account.
A compound interest calculator can help determine how much you could earn on your deposit. Using this when comparing rates can help you see why it is worth switching accounts.
3. Pay Attention to Rate Tiers
Banks sometimes offer different interest rates depending on how much money you give them. These are called rate tiers, with different rates applying to different-sized accounts.
When shopping for rates, pay attention to the rate tier that would apply to the account size you intend to open. Don’t be sucked in by an advertised rate that wouldn’t apply to your account size.
Instead, look for the best deal you can get for the money you have to deposit.
4. You Don’t Have to Accept Falling Rates
Even though interest rates are falling overall, most bank customers could still raise their interest rates.
That’s because there is a massive gap between the best and average rates. So, most bank customers accept rates much lower than others readily available on the market.
The latest America’s Best Rates survey found that the top high-interest savings account rate was more than five times the average. Significant rate differences can also be found among high-interest CDs and money market accounts. So be choosy because it pays to get one of the best high-interest savings accounts instead of settling for average.
5. Think Long Term
As usual, most long-term CDs are paying higher interest rates than savings accounts, money market accounts, and short-term CDs. With interest rates falling recently, long-term CDs offer the added advantage of allowing you to lock in an interest rate for a few years. That could make it even more rewarding to commit your money to a high-interest CD for an extended period.
Remember, though, there is typically a penalty if you take your money out before the CD’s maturity date. So, only commit to a CD with a longer term if you don’t think you’ll need the money before the CD’s period ends. Also, just in case, try to find a high-interest CD with a relatively minor early withdrawal penalty or a no-penalty CD.
6. Minimize Your Checking Account Balance
As low as savings account rates may seem, the best ones are still much better than most checking account interest rates. Therefore, you may want to keep a tighter rein on your checking account balance so more money can earn higher interest in a savings account.
One approach you can try is to have your paycheck directly deposited into savings rather than checking so you can have more money, earning a better interest rate for as long as possible.
Low-interest rates can be discouraging for savers. However, with the inflation rate now higher than savings account rates, you need to protect the value of your money by improving your saving habits and shopping for the best savings interest rates you can get.
How Much Interest Could You Earn with $1 Million in a Savings Account?
If you go to the savings accounts page of MoneyRates, you can see the latest information on which banks offer the best rates.
Note that these rates are quoted in terms of annual percentage yield (APY), which means they reflect the rate if compounded over one year.
Calculating compound interest is not hard to do. You can calculate what this would translate to in dollars using this formula:
Compound Interest Formula
Here’s how to convert the APY on a savings account into the amount of interest that it would produce on any given amount over a year:
Divide the APY by 100 and multiply the result by the amount you intend to invest.
For example, a 5.0% APY applied to a $1 million deposit would be calculated as:
(5.0/100) x $1,000,000 = $51,162
When deciding which bank to choose, you should be aware that the best savings accounts often offer rates that are several times the average savings account rate.
The average savings account rate was under 1% for quite a while. That means a $1 million in savings would typically earn less than $10,000 annually in interest. As of late, savings accounts are enjoying a resurgence, and some online banks offer rates in the 5% range.
A higher APY can make a big difference in the interest you earn, especially on large balances. Because of compounding, any difference in APY will deliver an increasingly more significant benefit the longer you invest.
You can use a compound interest calculator to see how much interest you can expect to earn on a given amount over any period you choose.
How Can I Make the Most of Compound Interest?
The nature of compound interest is such that choosing the highest yield (APY) from the beginning makes for the most profit.
Particularly where large sums of money are concerned and prolonged periods are involved, your investments grow the most if they earn a high-interest rate from the beginning. That’s why shopping for a savings account consistently pays the highest interest from the get-go is so important.
3 Factors That Maximize Compound Interest
If you want to maximize the return on your investment in a savings account, these are the three factors you need to know:
1. Interest on interest
Compound interest is the interest earned on the principal and in prior periods. Therefore, the more interest your account earns from the beginning, the more money there will be to compound in subsequent periods.
2. Number of compounding periods
Because of time, the power of compound interest has a chance to work. Since you are earning interest on appeal, the longer your money is invested, the more these earnings can snowball.
3. Compound frequency
The difference between a simple interest rate and APY is that APY reflects the impact of compounding within the year. How much difference this makes depends on how often interest is compounded within a year.
Different accounts may be compounded daily, monthly, or yearly. The more often an account is exacerbated, the more significant the difference between a simple interest rate and the APY on the performance.
A savings calculator can show you how this would translate into dollars for any amount and period you choose.
What’s the difference between high-yield savings accounts vs. certificates of deposit?
If you are prepared to commit your money for a pre-set period, a certificate of deposit (CD) might be worth considering as an alternative.
Key Takeaways: Find the Best Interest Account for Your Needs
Here’s how you can move forward with getting the right combination of safety and interest for your savings:
1. Decide whether you are willing to risk losing some of your money or if you want absolute safety.
2. Determine when you must access some or all of the money.
3. Decide what income account you need Based on your risk and timing needs.
4. You may find that you can choose from multiple types of accounts. For example, savings, money market, and cash management accounts provide safety, immediate liquidity, and interest.
5. Compare accounts with similar risk and timing characteristics to find the best yield for your money.
Frequently Asked Questions (FAQs)
Unless a high-yield savings account is in a tax-advantaged vehicle like an IRA, interest on savings accounts is typically taxed at the ordinary income rate for the tax year it is earned.
Technically, a high-yield savings account is no different from an ordinary account. However, the term “high yield” describes savings accounts whose interest rates are well above average.
High-yield savings accounts work the same way as ordinary ones, only they pay more interest. Their principal value does not fluctuate, and they earn interest continually throughout the year. You can access your money anytime, though the number of third-party transactions per month may be limited.
High-yield savings accounts make money from the interest rates offered by their banks. This is the only way high-yield savings accounts can make money, which is why it’s so important to compare interest rates when choosing a high-yield savings account.
