Banks and credit unions offering high yield savings accounts

High yield savings accounts are offered by online banks, traditional banks with online divisions, and credit unions. The institutions offering the highest rates tend to be online-only banks because they have lower overhead costs than branches. Traditional banks with physical locations usually offer lower rates on savings accounts, though some have created online divisions with competitive rates.

Online banks currently offering high yield savings accounts include Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, Discover Bank, and Capital One 360. Credit unions like Connexus Credit Union and Pentagon Federal Credit Union also offer high yield savings products, though rates and terms vary by membership may be able to access. Traditional banks like Chase, Bank of America, and Wells Fargo offer savings accounts, but their standard rates are typically much lower than online alternatives.

The rate you receive depends on the institution, the account type, and the balance you maintain. Some banks offer tiered rates where higher balances earn higher APY. Others offer a single rate for all balances above a minimum. Rates change frequently—sometimes weekly—so the highest-paying option today may not be the highest next month.

Key Takeaways

  • Online banks typically offer higher rates than traditional banks because they operate without physical branch costs.
  • The same bank may offer different rates on different account types, so comparing the specific account you want matters more than comparing banks generally.
  • Rates change regularly, and the bank offering the highest rate this week may not be the highest next week.
  • Credit unions can offer competitive rates, but membership requirements vary—some are open to the public, others require employment or location-based membership.
  • All deposits at FDIC-insured banks and NCUA-insured credit unions are protected up to $250,000 per account holder per institution.

How online banks keep rates higher than traditional banks

Online banks operate with significantly lower costs than banks with branch networks. They do not pay for building leases, teller salaries, or the infrastructure to maintain physical locations. This cost difference allows them to pass higher rates to depositors. The tradeoff is that you cannot walk into a branch to deposit cash or speak with someone in person—all transactions happen through a website, mobile app, or phone.

Traditional banks maintain branch networks because some customers prefer in-person banking and because branches generate revenue through other services like loans and investment products. The cost of maintaining those branches is reflected in lower savings rates. Some traditional banks have created online divisions (like Chase's online savings or Bank of America's online savings) to compete on rate, but these divisions still operate within the larger bank's cost structure.

What to check before opening an account

Before opening a high yield savings account, confirm the current APY and whether it applies to your balance size. Banks advertise rates prominently, but the fine print matters. Some accounts have a minimum balance requirement—if your balance drops below it, the rate may decrease. Others have no minimum. Some banks offer promotional rates for new customers that expire after a set period, usually three to twelve months.

Verify that the institution is FDIC-insured (for banks) or NCUA-insured (for credit unions). This insurance protects your deposits up to $250,000 per account holder per institution if the bank or credit union fails. You can check FDIC insurance status on the FDIC's BankFind tool and NCUA insurance status on the NCUA's Credit Union Locator.

Check the withdrawal rules. Most high yield savings accounts allow six withdrawals per month without penalty, though this rule has become less common since 2020. Some banks charge a fee for excess withdrawals; others straightforward restrict the number. If you plan to access your money frequently, confirm the bank's policy before opening the account.

Credit unions versus banks for high yield savings

Credit unions are member-owned cooperatives, not for-profit institutions. Because they do not answer to shareholders, they can return earnings to members through higher rates and lower fees. Some credit unions offer high yield savings rates competitive with online banks. However, credit union membership is restricted—you must meet specific criteria to join, such as working for a particular employer, living in a certain area, or belonging to an organization.

Connexus Credit Union and Pentagon Federal Credit Union are two of the largest credit unions offering high yield savings to members who meet their requirements. Connexus membership is open to anyone in the United States. Pentagon Federal requires you to be a military member, veteran, or family member of either. Other credit unions have narrower membership bases tied to specific employers or regions.

If you are may be able to access for a credit union with a competitive rate, the account may offer the same or better rates than online banks, plus the added benefit of credit union membership. If you are not may be able to access, online banks remain your best option for high yield savings.

Rate comparison and how often rates change

High yield savings rates move in response to the Federal Reserve's interest rate decisions. When the Fed raises its benchmark rate, banks typically raise savings rates within days or weeks. When the Fed cuts rates, banks lower savings rates more slowly, but they do lower them. This means the highest-paying account today may not be the highest-paying account in three months.

Comparing rates across institutions requires checking each bank's website directly, because rates vary by account type and change frequently. A bank's advertised rate on its homepage may not be the rate you receive—some banks offer different rates to new customers versus existing customers, or different rates based on balance tier. Reading the account terms before opening tells you the actual rate you will receive.

Some websites track high yield savings rates across multiple banks and update them regularly. These sites can give you a snapshot of which banks are currently offering the highest rates, but you should verify the rate on the bank's own website before opening an account, because rates can change between when a tracking site updates and when you explore.

Alternatives if you want even higher returns

High yield savings accounts are designed for safety and liquidity—your money is accessible and insured. If you are willing to accept less liquidity or slightly more risk, other options may offer higher returns. Money market accounts function similarly to savings accounts but sometimes offer higher rates in exchange for higher minimum balances. Certificates of deposit (CDs) lock your money away for a set term (three months to five years) but typically pay higher rates than savings accounts for that tradeoff.

Treasury bills and short-term Treasury bonds are backed by the U.S. government and currently offer rates in the same range as high yield savings accounts, with the advantage of being backed directly by the government rather than by bank insurance. The disadvantage is that selling them before maturity involves a small transaction cost, and the process is less convenient than withdrawing from a savings account.

Frequently Asked Questions

Can I move money between high yield savings accounts if rates change?

Yes. You can open an account at a new bank and transfer your balance from your old account. The transfer typically takes three to five business days. There is no penalty for closing a savings account or moving your money, though some banks offer promotional rates that expire if you withdraw within a certain period—check the terms before opening.

What happens to my rate if the Federal Reserve cuts interest rates?

Banks lower savings rates when the Fed cuts rates, but the timing and amount vary. Some banks lower rates within days; others wait weeks. Your rate may drop by the full amount the Fed cut, or by less. You are not locked into a rate on a savings account—it can change at any time, which is why checking rates periodically matters if you want to stay with the highest-paying option.

Is my money safe in an online bank?

Yes, as long as the bank is FDIC-insured. FDIC insurance protects deposits up to $250,000 per account holder per institution, regardless of whether the bank has physical branches. Online banks are regulated by the same federal agencies as traditional banks and must meet the same capital and safety requirements.

Do I need a minimum balance to get the advertised rate?

It depends on the bank and account. Some banks offer their advertised rate on any balance above $0. Others require a minimum balance—commonly $500, $1,000, or $2,500—to earn the stated rate. If your balance falls below the minimum, the rate may drop to a lower tier. Check the account terms on the bank's website to see what minimum, if any, applies.

Can I use a high yield savings account as my main checking account?

Most high yield savings accounts are not designed for frequent transactions. They typically limit you to six withdrawals per month, and some charge fees for excess withdrawals. If you need to make many transactions, a checking account is more appropriate. Many banks offer both a checking account and a high yield savings account, so you can use checking for daily spending and savings for money you want to keep separate and earning interest.