Banks and credit unions that offer high yield savings accounts

High yield savings accounts live at online banks, some traditional banks with online divisions, and a few credit unions. The accounts that pay the highest rates are almost always at banks that have no physical branches — they cut costs by operating only online, and pass some of that savings to depositors as higher interest rates.

Online banks like Marcus, Ally, American Express Personal Savings, and Discover Bank have consistently offered rates at or near the top of the market. Traditional banks with strong online operations — Citi, Chase, and Bank of America — also offer high yield accounts, though their rates are typically lower than pure online competitors. Credit unions vary widely; some offer competitive rates through their own high yield savings products, while others participate in shared branching networks that let you access accounts across multiple institutions.

The rate you see advertised today will not be the rate you earn next month. Banks adjust rates based on what the Federal Reserve does and what competitors are offering. When you compare accounts, check the current rate on the day you plan to open, not the rate you saw last week.

Key Takeaways

  • Online-only banks typically offer the highest rates because they have lower operating costs than banks with physical branches.
  • Your rate can change at any time after you open the account, so the advertised rate is not locked in for the life of the account.
  • You can move money between a high yield savings account and a checking account at the same bank when ready, or transfer to another bank in one to two business days.
  • The FDIC insures deposits up to $250,000 per account holder per bank, so opening accounts at multiple banks lets you protect more money.
  • Some high yield accounts have monthly fees or minimum balance requirements, though many of the top-paying accounts have neither.

How to compare rates across different banks

Rate comparison sites like Bankrate, DepositAccounts, and DepositAccounts.com pull current rates from banks and update them daily. These sites let you sort by rate, minimum balance, and whether the account has a monthly fee. The rates shown are the banks' stated annual percentage yields (APY), which already account for how often interest compounds.

When you find an account that interests you, visit the bank's website directly to confirm the rate is still current. Banks sometimes offer promotional rates for new customers that are higher than the standard rate, and these promotions appear on the bank's site before they show up on comparison sites. Read the fine print to see whether the promotional rate applies to your deposit amount and how long it lasts.

Do not assume the highest rate is always the best choice. An account with a $25,000 minimum balance and a $10 monthly fee if you fall below it costs you money if you cannot maintain that balance. An account with no minimum and no fees, paying a rate 0.10% lower, may be the better deal for your situation.

What happens when you open an account online

Opening a high yield savings account online takes 10 to 20 minutes. You will need a government-issued ID, your Social Security number, and proof of your current address (a recent utility bill or bank statement works). The bank will ask for your name, date of birth, address, and employment status. Some banks ask for your income or the source of the funds you plan to deposit.

After you submit your information, the bank runs a background check and verifies your identity. Most approvals happen when ready or within a few hours. Once approved, the bank gives you account details and routing number. You can then transfer money into the account from another bank account you own, or deposit a check by photograph if the bank offers mobile deposit.

Some banks require an initial deposit before the account opens; others let you open the account first and deposit later. Check the bank's requirements before you start the process.

Moving money in and out of a high yield savings account

Money moves between accounts in two ways: transfers and withdrawals. A transfer moves money from one account to another electronically. If both accounts are at the same bank, the transfer is when ready. If you are transferring from a high yield savings account at one bank to a checking account at a different bank, the transfer takes one to two business days.

A withdrawal moves money out of the account to your debit card or to a third-party account. Federal rules once limited you to six withdrawals per month from a savings account, but that rule was suspended in 2020 and has not been reinstated. You can withdraw as often as you want, though some banks charge a fee for transfers to external accounts beyond a certain number per month.

If you need cash when ready, you cannot withdraw directly from a high yield savings account at an online bank — there are no ATMs. You have to transfer the money to a checking account first, then withdraw from an ATM. This takes one to two business days. If you need cash today, keep your emergency fund in a checking account or at a bank with ATM access.

FDIC insurance and protecting your deposits

The FDIC (Federal Deposit Insurance Corporation) insures deposits at member banks up to $250,000 per account holder per bank. This means if the bank fails, the FDIC will return your money up to that limit. Savings accounts, checking accounts, and money market accounts are all covered under the same $250,000 limit per bank.

If you have more than $250,000 to save, you can open accounts at multiple banks to protect all of it. A $300,000 deposit split between two banks — $250,000 at Bank A and $50,000 at Bank B — is fully insured. The FDIC website has a tool that lets you calculate your coverage across multiple accounts and institutions.

Credit unions use a similar system called NCUA (National Credit Union Administration) insurance, which also covers up to $250,000 per account holder per institution. If you use both a bank and a credit union, your deposits are insured separately.

Fees and minimum balance requirements to watch for

Many high yield savings accounts have no monthly maintenance fee and no minimum balance. Some banks charge a monthly fee ($5 to $15) if your balance falls below a threshold, or charge a fee for each transfer to an external account beyond a set number per month.

Read the fee schedule before you open the account. A $10 monthly fee on an account earning 4.5% APY on a $10,000 balance costs you $120 per year — money that erases about one-third of your interest earnings. An account with no fee and a 4.4% rate would leave you ahead.

Some banks waive fees if you set up direct deposit or maintain a linked checking account with them. Others waive fees only during a promotional period. Confirm what the fee structure is after any promotional period ends.

Frequently Asked Questions

Can I open a high yield savings account if I do not have a checking account?

Yes. A high yield savings account is a standalone product; you do not need a checking account at the same bank to open one. You will need a way to move money in and out, which you can do by transferring from a checking account at another bank, or by depositing checks by photograph if the bank offers mobile deposit.

What if the bank lowers the interest rate after I open the account?

Banks can change rates at any time without notice. Your money stays in the account earning the new rate. If the rate drops significantly, you can transfer your balance to a different bank offering a higher rate. There is no penalty for closing a high yield savings account.

Do I have to pay taxes on the interest I earn?

Yes. Interest earned in a high yield savings account is taxable income. The bank will send you a 1099-INT form at the end of the year showing how much interest you earned, and you report that amount on your tax return. The interest is taxed at your ordinary income tax rate, not as capital gains.

How long does it take to transfer money from a high yield savings account to my checking account?

If both accounts are at the same bank, the transfer is when ready. If you are transferring to a checking account at a different bank, it takes one to two business days. Weekends and holidays do not count as business days, so a transfer initiated on Friday may not arrive until Tuesday.

Can I use a debit card with a high yield savings account?

Most high yield savings accounts do not come with a debit card. Online banks typically issue debit cards only for checking accounts. If you need to spend money directly from savings, you would transfer it to a checking account first, or open a checking account at the same bank and link it to your savings account for straightforward transfers.