TD Bank does not offer a dedicated high yield savings account

TD Bank's standard savings accounts earn interest rates well below what you can find elsewhere. As of early 2024, their regular savings accounts pay rates in the range of 0.01% to 0.05% annual percentage yield (APY), depending on the account type and balance. That means $10,000 sitting in a TD savings account earns roughly $1 to $5 per year.

If you are looking for a high yield savings account — typically defined as accounts paying 4% APY or higher — you will not find one under the TD Bank brand. TD Bank is a traditional brick-and-mortar bank with physical branches, and those banks generally do not compete on savings rates because their business model relies on lending out deposits at higher rates.

What TD Bank does offer are money market accounts and certificates of deposit (CDs), which pay slightly better rates than savings accounts but still lag far behind online banks. A TD money market account might pay 0.10% to 0.15% APY, and CD rates vary by term length but typically range from 4% to 5% APY depending on current market conditions.

Key Takeaways

  • TD Bank savings accounts pay 0.01% to 0.05% APY, which is roughly one-tenth of what online high yield savings accounts pay.
  • Money market accounts at TD Bank pay slightly more than savings accounts but still under 0.20% APY in most cases.
  • TD Bank CDs offer competitive rates (4% to 5% APY depending on term) if you can lock money away for a fixed period.
  • Online banks like Marcus, Ally, and American Express offer high yield savings accounts paying 4% to 5% APY with no monthly fees.
  • You can keep a TD checking account for everyday banking while holding a high yield savings account elsewhere for your emergency fund or savings goals.

How TD Bank's savings products compare to each other

TD Bank offers three main savings vehicles, and the rates increase slightly as you move from savings to money market to CD, but none reach what online banks call "high yield."

A TD savings account is the most basic option. You can withdraw money anytime without penalty, but the rate is so low that inflation erodes your balance faster than interest builds it. There is no minimum balance requirement on some TD savings accounts, though others require $100 to $500 to open.

A TD money market account combines features of savings and checking. You get a debit card and limited check-writing, but the rate is still under 0.20% APY. These accounts often require a higher minimum balance — sometimes $2,500 or more — to avoid monthly fees.

A TD certificate of deposit locks your money for a set term (3 months, 6 months, 1 year, 2 years, or longer). In exchange, you get a fixed rate that is currently competitive with online banks — around 4% to 5% APY depending on the term. The catch: if you withdraw before the term ends, you pay an early withdrawal penalty that can wipe out months of interest.

Why online banks pay more than TD Bank

Online banks have lower overhead costs than traditional banks with branch networks. They do not pay for building leases, tellers, or branch managers. That savings gets passed to customers as higher interest rates on savings accounts.

TD Bank, by contrast, maintains hundreds of physical branches across the Northeast and Mid-Atlantic. That infrastructure costs money, and the bank recovers it by paying lower rates on deposits and charging higher rates on loans. You are paying for the convenience of walking into a branch, even if you never use it.

Another factor: traditional banks like TD rely on customer loyalty and habit. Many people keep their savings at the same bank where they have their checking account, even if the rate is poor. Online banks have no branches to fall back on, so they must compete on rate alone.

When a TD CD might make sense despite lower rates

TD Bank's CDs currently pay 4% to 5% APY, which is competitive with online banks for the same term length. If you have money you do not need for 1 to 5 years, a TD CD is worth comparing to online options.

The advantage of a TD CD is simplicity if you already bank with TD. You can open it in a branch or online in minutes, and you do not have to move money between institutions. The disadvantage is that you cannot touch the money without paying a penalty — typically three to six months of interest, depending on the term.

Online banks like Ally and Marcus also offer CDs at similar rates, and some have lower early withdrawal penalties. If you are comparing, check the penalty structure carefully. A CD that pays 4.75% but charges six months of interest as a penalty is less flexible than one paying 4.50% with a three-month penalty.

How to move money to a high yield savings account while keeping TD

You do not have to close your TD account to open a high yield savings account elsewhere. Most people keep their checking account at TD for bill pay and everyday spending, then move savings to an online bank.

The process is straightforward: open an account at an online bank (Marcus, Ally, American Express, or another), and link your TD checking account. You can then transfer money electronically between the two. Transfers typically take one to three business days.

Some people set up automatic transfers — for example, moving $500 from TD checking to a high yield savings account every payday. That way, the money earns 4% or more instead of sitting in a TD account earning 0.01%.

If you have a large balance, the difference adds up quickly. $50,000 in a TD savings account earning 0.05% APY generates $25 per year. The same $50,000 in a 4.5% APY high yield savings account generates $2,250 per year — a difference of $2,225 annually.

What to watch if you keep savings at TD Bank

If you decide to keep your savings at TD despite the low rates, be aware of monthly maintenance fees. TD Bank charges $5 to $15 per month on some savings accounts if you do not meet minimum balance or direct deposit requirements.

Check your specific account terms. Some TD savings accounts waive the fee if you maintain a $500 minimum balance or set up direct deposit. Others charge the fee regardless. Over a year, a $5 monthly fee costs $60 — money that would have been earned as interest in a high yield account.

Also confirm the APY on your specific account type. TD offers several savings products with different rate tiers, and the rate you earn depends on your account version and balance level. Log into your TD account online or call 1-800-788-7000 to confirm your current rate.

Frequently Asked Questions

Can I open a high yield savings account at TD Bank online?

No. TD Bank does not offer a high yield savings account product at any rate. Their online savings accounts pay the same low rates (0.01% to 0.05% APY) as their in-branch accounts. If you want high yield savings, you will need to open an account at a different bank.

What is the highest interest rate TD Bank pays on any savings product?

TD Bank's highest rates are on certificates of deposit, which currently pay 4% to 5% APY depending on the term length. These rates are competitive with online banks, but your money is locked away for the full term. Savings accounts and money market accounts pay under 0.20% APY.

Will I lose my TD checking account if I open a high yield savings account elsewhere?

No. You can keep your TD checking account for everyday banking and bill pay while opening a high yield savings account at another bank. The two accounts can be linked, so you can transfer money between them electronically whenever you need to.

How much more money would I earn in a high yield account versus TD Bank?

On a $10,000 balance, a TD savings account earning 0.05% APY generates $5 per year. A high yield account earning 4.5% APY generates $450 per year — a difference of $445. The larger your balance, the bigger the gap. On $100,000, the difference is $4,450 per year.

Is there a penalty for closing a TD savings account?

TD Bank does not charge a penalty for closing a savings account. You can withdraw your balance and close the account anytime without fees. However, if you close within 30 days of opening, some account types may forfeit any interest earned. Check your account terms to confirm.