The main places that offer HYSAs

A high-yield savings account (HYSA) is offered by online banks, credit unions, and some traditional banks. Online banks like Marcus, Ally, and American Express Personal Savings typically offer the highest rates because they have lower overhead costs than brick-and-mortar branches. Credit unions often offer competitive rates to their members, though you usually need to meet membership requirements first. Some traditional banks with physical locations also offer HYSAs, but their rates are often lower than online options.

The rate you earn changes over time and varies between institutions. When you're comparing options, check the current rate each bank is advertising right now — don't rely on what you saw last month. The rate is usually listed on the bank's website under "savings accounts" or "deposit products," and it should show the annual percentage yield (APY), which is the rate you'll actually earn after compounding.

Key Takeaways

  • Online banks typically offer higher rates than traditional banks because they don't maintain physical branches, so you'll want to check their current rates before opening an account.
  • Credit unions can offer competitive rates to members, but you may need to meet membership requirements or maintain a minimum balance to join.
  • You can open an HYSA entirely online with most banks — you'll need a government ID, Social Security number, and proof of address, which takes 10 to 15 minutes.
  • FDIC insurance protects up to $250,000 in each account at FDIC-insured banks, so if you have more than that, you may need accounts at multiple institutions.
  • Once your account is open, you can transfer money in from another bank account, though the first transfer may take one to three business days.

Online banks and what they require to open an account

Opening an account at an online bank is the fastest route. You'll need a valid government-issued ID (driver's license, passport, or state ID), your Social Security number, and proof of your current address — usually a recent utility bill, lease, or bank statement. Some banks ask for all three pieces of information during signup; others verify your address later. The whole process takes about 10 to 15 minutes on a computer or phone.

Once you submit your information, the bank verifies your identity electronically. Most accounts are approved within minutes, though some banks may take a few hours or ask follow-up questions if something doesn't match their records. After approval, you can start transferring money in. Your first transfer from another bank account usually takes one to three business days because the banks are confirming the account is real and belongs to you.

Online banks have no physical locations, so you can't walk in to deposit cash or speak to someone in person. If you need to deposit cash, you'll have to transfer it from another bank account or use a mobile check deposit if the bank offers it. Most online banks don't offer check deposits, so ask before you open an account if that matters to you.

Credit unions and membership requirements

Credit unions are member-owned financial institutions that often offer rates competitive with online banks. To open an account, you first have to become a member. Membership requirements vary widely — some credit unions are open to anyone in a geographic area, others require you to work for a specific employer, and some are open only to members of a particular organization or group.

You can search for credit unions you're may be able to access to join using the CO-OP Network locator or the Shared Branch locator on the Credit Union National Association website. Once you find one that accepts you, the membership process is usually straightforward: you fill out a membership process (in person or online), provide an ID and Social Security number, and make a small deposit — often $5 to $25 — to open a share account, which is the credit union equivalent of a checking account. Some credit unions let you do this entirely online.

Credit unions often have lower minimum balance requirements than traditional banks, and some have no minimum at all. However, their rates change less frequently than online banks, so you may earn slightly less. The advantage is that credit unions often have physical locations and ATM networks, so you can deposit cash in person if you need to.

Traditional banks with physical locations

Banks like Chase, Bank of America, and Wells Fargo offer savings accounts at their branches, but their HYSA rates are typically much lower than online banks or credit unions. If you already have a checking account at a traditional bank, opening a savings account there is convenient — you can do it online or in person, and you already have the ID and address proof they'll need.

The trade-off is rate. A traditional bank's HYSA might earn 4% to 5% APY, while an online bank might earn 4.5% to 5.3% at the same time. Over a year, that difference adds up. If you have $10,000 in savings, the difference between 4% and 5% is $100 per year. If you're keeping money in savings for a long time, choosing a higher rate saves you money.

Traditional banks do offer one advantage: if you need to deposit cash, you can walk into a branch. Some people find this worth the lower rate; others don't. Think about how often you actually deposit cash before deciding.

How to compare rates across banks

Rates change frequently, sometimes weekly. Before you open an account, visit the bank's website and look for the current APY on their savings account page. Write down the rate, the bank name, and the date you checked. Then check two or three other banks the same day so you're comparing rates from the same moment in time.

Pay attention to whether the rate requires a minimum balance. Some banks offer a high rate only if you keep at least $1,000 or $10,000 in the account. If you have less, they may pay a lower rate. This information is usually in small print below the rate, so read carefully.

Also check whether the rate is may provide or promotional. A promotional rate might be high for three months, then drop to a lower rate. A may provide rate is what the bank plans to pay going forward, though they can change it at any time. Banks are required to tell you if a rate is promotional, so if you don't see that word, assume it's the regular rate.

FDIC insurance and account limits

FDIC insurance protects your money if the bank fails. Each depositor is covered up to $250,000 per bank at FDIC-insured banks. If you have more than $250,000 in savings, you can protect all of it by opening accounts at different FDIC-insured banks — the insurance covers each account separately.

Most online banks, credit unions, and traditional banks are FDIC-insured. You can check whether a specific bank is insured by searching the FDIC's Bank Find tool on their website. If a bank is not FDIC-insured, your money is not protected if the bank fails, so avoid banks that aren't covered.

Credit unions are covered by a similar program called NCUA insurance, which also protects up to $250,000 per member per institution. The protection works the same way as FDIC insurance.

Moving money in and out of your HYSA

Once your account is open, you can transfer money in from another bank account. You'll need the routing number and account number of the account you're transferring from. Most banks let you set up a transfer online in a few minutes. The first transfer usually takes one to three business days because the banks are verifying the account is real.

After your first transfer, future transfers are usually faster — sometimes same-day or next-day. Some banks limit how many transfers you can make per month, though this is less common than it used to be. Check your bank's rules before you open an account if you plan to move money frequently.

If you need to withdraw money, you can transfer it back to another account the same way. You can also request a check or use a debit card if your bank issues one. Some online banks don't issue debit cards, so if you want one, ask before you open an account.

Frequently Asked Questions

Can I open an HYSA if I don't have a Social Security number?

Most banks require a Social Security number or Individual Taxpayer Identification Number (ITIN) to open an account. If you have an ITIN, you can use that instead. Some credit unions may have different rules, so call ahead to ask before you visit.

What if I don't have a government ID?

You'll need some form of government-issued ID — a driver's license, passport, state ID, or tribal ID. If you don't have any of these, contact the bank directly to ask what alternatives they accept. Some banks may ask for additional documents like a utility bill or lease to verify your identity.

How long does it take to earn interest on money I deposit?

Interest starts accruing as soon as the money is in your account and cleared. If you transfer money from another bank, it usually takes one to three business days to clear. Once it's cleared, you start earning interest. Interest is usually paid monthly or daily, depending on the bank.

Can I have multiple HYSAs at different banks?

Yes. Many people open accounts at multiple banks to earn different rates or to keep their money organized. Just remember that FDIC insurance covers up to $250,000 per bank, so if you have more than that total, spreading it across banks protects all of it.

What happens if the bank lowers its rate after I open an account?

Banks can change rates at any time. If your bank lowers its rate and you find a better rate elsewhere, you can transfer your money to the new bank. There's no penalty for closing an HYSA, so you're free to move your money whenever you want.