Where to find a high yield savings account

High yield savings accounts exist at three types of institutions: online banks, some traditional banks with online divisions, and credit unions. Online banks offer the highest rates because they have lower overhead costs — no physical branches to maintain. Traditional banks with brick-and-mortar locations typically offer lower rates on savings, though many now have online divisions with competitive rates. Credit unions, which are member-owned rather than shareholder-owned, sometimes offer high yield options to their members.

The banks and credit unions offering these accounts change their rates weekly or monthly based on what the Federal Reserve does and what competitors offer. This means the highest-paying option today may not be the highest next month. The rate you see advertised is the Annual Percentage Yield, or APY — that's the actual return you'll earn in a year if you don't touch the money.

You can compare current rates on financial comparison websites, but those sites don't show every institution. Calling or visiting the website of banks you already use is often the fastest way to see what they offer right now.

Key Takeaways

  • Online banks typically pay higher rates than traditional banks because they don't operate physical branches, so they pass savings to depositors.
  • The rate you see today will change within weeks or months, so comparing rates is useful only for the current moment, not for picking a bank for years ahead.
  • Credit unions may offer competitive rates to members, but you must be may be able to access to join — membership rules vary by union.
  • Your deposits are insured up to $250,000 per account type at FDIC-insured banks and NCUA-insured credit unions, regardless of the rate offered.

Online banks with high yield savings accounts

Online banks have no physical locations, which means lower costs and higher rates passed to you. Examples include Marcus (owned by Goldman Sachs), Ally Bank, American Express Personal Savings, Discover Bank, and LendingClub. Each of these holds FDIC insurance, meaning your money is protected up to $250,000 if the bank fails.

To open an account at an online bank, you'll need a Social Security number, proof of identity (usually a driver's license or passport), and a way to fund the account — either a transfer from another bank or a check deposit through their mobile app. The whole process typically takes 10 to 15 minutes online. You won't have a physical card or branch to visit, but you can withdraw money through ATM networks (some banks reimburse ATM fees, others don't) or transfer funds to another account.

Online banks change their rates frequently. If you open an account and the rate drops three months later, you're not locked in — you can move your money to a different bank. There's no penalty for closing a high yield savings account.

Traditional banks with online high yield options

Many large banks — including Chase, Bank of America, Wells Fargo, and Citibank — now offer high yield savings accounts through their online divisions, separate from their regular savings products. These accounts often have the same FDIC protection and similar features to online-only banks, but the rates are usually lower because the bank operates physical branches.

The advantage of using your existing bank's online savings account is convenience: you can move money between accounts when ready, and you may already have the login credentials set up. The disadvantage is that you're paying for the bank's branch network through lower rates. If you already have a checking account at one of these banks, opening their high yield savings account takes just a few clicks in your online banking portal.

Ask your bank directly what rate they're currently offering, because their website may not display it prominently — they have less incentive to advertise it than online-only banks do.

Credit unions with high yield savings

Credit unions are member-owned financial institutions, and some offer high yield savings accounts to members. Examples include Navy Federal Credit Union, Pentagon Federal Credit Union, and Connexus Credit Union. Credit union accounts are insured by the National Credit Union Administration (NCUA) up to $250,000, the same protection as FDIC insurance.

To open an account at a credit union, you must first become a member. Membership requirements vary: some credit unions serve people who work in a specific industry, live in a specific county, or belong to a specific organization. Others have opened membership to anyone. You'll need to research whether you're may be able to access to join before you can open an account.

Credit union rates are competitive but not always the highest. Because credit unions are smaller than online banks, they may not match the rates of the largest online competitors. However, if you already belong to a credit union, it's worth asking what savings rates they offer.

What to check before opening an account

Before you move money to a high yield savings account, confirm three things. First, verify that the bank or credit union is FDIC-insured (for banks) or NCUA-insured (for credit unions). This information is on their website, usually in the footer or under "Security" or "About Us." If your bank fails, this insurance protects your money up to $250,000.

Second, check whether there are fees. Most high yield savings accounts have no monthly maintenance fee, no minimum balance requirement, and no fee to withdraw money. Some banks charge a fee if you make more than a certain number of withdrawals per month — typically six — though this rule is less common than it used to be. Read the account terms before you open it.

Third, understand how you'll access your money. Online banks have no branches, so you'll withdraw through ATM networks or transfers. Some reimburse ATM fees; others don't. If you need to walk into a physical location to deposit cash or speak to someone in person, an online bank won't work for you.

How rates change and what that means for you

Banks raise and lower their high yield savings rates based on what the Federal Reserve does and what competitors are offering. When the Federal Reserve raises its benchmark interest rate, banks have more incentive to offer higher rates to attract deposits. When the Fed lowers rates, banks lower their rates too. A bank might also lower its rate straightforward because it has enough deposits and doesn't need to attract more customers.

This means the rate you earn today will almost certainly be different in six months. You're not locked into a rate — if your bank drops its rate and another bank is paying more, you can move your money. There's no penalty, and the process takes a few days. Some people move their money between banks every few months to chase the highest rate; others pick a bank they trust and stay put even if the rate drops slightly.

The difference between a 4.5% rate and a 5.0% rate matters if you have a large balance, but if you have $5,000 saved, the difference is about $25 per year. Don't stress about picking the absolute highest rate — pick a bank you trust, confirm it's insured, and check the rate once or twice a year.

Frequently Asked Questions

Can I have high yield savings accounts at multiple banks?

Yes. You can open accounts at as many banks as you want. Each account is insured separately up to $250,000, so if you have $500,000 in savings, you could put $250,000 at one FDIC-insured bank and $250,000 at another and both would be fully protected. Some people open accounts at multiple banks to diversify or to chase slightly higher rates.

What's the difference between a high yield savings account and a money market account?

A money market account is similar to a high yield savings account — both pay interest and are FDIC-insured — but money market accounts sometimes come with a debit card or checkbook, which savings accounts don't. Money market accounts may also have higher minimum balance requirements. For most people, a high yield savings account is simpler.

If I move my money to a different bank, will I lose the interest I've already earned?

No. Interest is calculated daily and paid monthly (or sometimes quarterly). When you close an account, you receive all interest earned up to that point. You only lose future interest — the interest you would have earned if you'd left the money there.

Do I need a minimum balance to open a high yield savings account?

Most online banks and credit unions have no minimum balance requirement. Some traditional banks may require $500 or $1,000 to open. Check the specific bank's requirements before you open an account — this information is usually on their website under account terms.

What happens to my money if the bank goes out of business?

If an FDIC-insured bank fails, the FDIC takes over and protects your deposits up to $250,000. You'll have access to your money within days. NCUA insurance works the same way for credit unions. This protection applies regardless of the interest rate the bank was paying.