The fastest way to find a high-yield savings account

A high-yield savings account is a regular savings account that pays you more interest on the money you keep in it. The interest rate is higher than what most traditional banks offer — sometimes five to ten times higher. You can open one online in about 15 minutes, and the account works the same way as any other savings account: you deposit money, watch it grow, and withdraw when you need it.

Most high-yield accounts are offered by online banks and credit unions, not by the brick-and-mortar banks on your street. Online banks have lower costs because they don't run physical branches, so they pass some of that savings to you as higher interest rates. You'll need an internet connection to set up the account and manage it, but you can deposit money by transferring it from another bank account or by mailing a check.

The interest rate you earn changes over time — it's not locked in. Banks raise and lower their rates based on what the Federal Reserve does with its own rates. When you're comparing accounts, look at the current rate, but also check whether the bank has a history of keeping rates competitive when the market shifts.

Key Takeaways

  • High-yield savings accounts are offered mainly by online banks and credit unions, which can afford to pay higher interest because they have no physical branches.
  • You can open an account online in 15 minutes with a government ID, proof of address, and a way to fund the account from another bank.
  • Interest rates change frequently and are not may provide, so compare current rates across several banks before deciding.
  • Your money is insured up to $250,000 per account at banks with FDIC insurance or at credit unions with NCUA insurance, so your deposits are protected even if the bank fails.

Online banks that offer high-yield savings accounts

Online banks are the most common place to find high-yield rates. Banks like Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, and Discover Bank all offer high-yield savings accounts with no monthly fees and no minimum balance requirement. Each one has a different current interest rate, and that rate changes based on market conditions.

To compare them, visit each bank's website and look for the current Annual Percentage Yield (APY) — this is the actual rate you'll earn in a year. Write down the rate for each bank you're considering, because rates change weekly and you want to know what you're comparing. Most online banks let you open an account and start earning interest the same day you fund it.

Online banks typically require you to have another bank account to transfer money from, because they can't accept cash deposits in person. If you don't have another bank account yet, you can mail a check to deposit it, though this takes longer.

Credit unions and their high-yield options

Credit unions are member-owned financial institutions that often pay competitive interest rates on savings accounts. Some credit unions offer Share Savings Accounts (the credit union term for savings accounts) with rates that match or beat online banks. The catch is that you have to be a member of the credit union to open an account, and membership rules vary.

To find a credit union near you, use the CO-OP Network locator or the Allpoint ATM network — these show you which credit unions you can join and what their current rates are. Some credit unions let anyone join; others require you to live or work in a certain area, belong to a particular employer, or be part of a specific organization. A few credit unions have opened membership to anyone in the United States, which makes them worth checking.

Credit union accounts are insured by the National Credit Union Administration (NCUA), which works the same way as FDIC insurance at banks — your money is protected up to $250,000 if the credit union fails.

Banks with physical branches that offer high-yield savings

Some traditional banks with branches in your town offer high-yield savings accounts, though their rates are usually lower than online banks. Banks like Ally (which has some physical locations), Charles Schwab Bank, and a few regional banks offer rates that are competitive, but you'll want to compare them against online options before opening.

The advantage of a branch-based bank is that you can deposit cash in person and talk to someone face-to-face if you have questions. The disadvantage is that you're usually paying for the cost of those branches through lower interest rates. If you already have a checking account at a traditional bank and want to keep everything in one place, ask your bank what high-yield savings options they offer.

What you need to open an account

Most banks require the same basic information to open a high-yield savings account. You'll need a government-issued ID (a driver's license or passport), proof of your current address (a recent utility bill or lease), and your Social Security number. The bank will also ask for your employment status and income, though they don't verify this information the way a mortgage lender would.

You'll also need a way to fund the account. If you're opening at an online bank, you'll transfer money from another bank account you already have — the bank will ask for your routing number and account number. If you're opening at a credit union or branch bank, you can deposit cash in person or transfer from another account.

The entire process takes about 15 minutes online. Some banks let you start earning interest before your first deposit clears, and others wait until the money arrives. Check the bank's website to see which applies.

How to compare rates and choose between accounts

Interest rates change constantly, so the best account today might not be the best next month. When you're comparing, look at the current APY on each bank's website and write them down. Then check whether each bank has a history of keeping rates competitive — you can do this by looking at rate tracking websites like DepositAccounts.com or BankRate.com, which show historical rates for each bank.

Also check whether the account has any hidden costs. Most high-yield savings accounts have no monthly fees, no minimum balance, and no fees for transfers or withdrawals. If a bank charges a monthly fee or requires you to keep a certain amount in the account, that eats into your interest earnings and makes the account less attractive.

Finally, make sure the bank is insured. If the bank has FDIC insurance or the credit union has NCUA insurance, your money is protected up to $250,000 even if the institution fails. You can verify this on the FDIC or NCUA website by searching for the bank's name.

Moving money into and out of your account

Once your account is open, you can move money in and out in several ways. The most common is an electronic transfer from another bank account you own — this usually takes one to three business days. You can also mail a check to the bank, though this takes longer. Some online banks let you set up automatic transfers on a schedule, so money moves from your checking account to your savings account every payday without you having to remember.

Withdrawals work the same way. You can transfer money back to your checking account, request a check, or in some cases use a debit card linked to the savings account. Most banks limit you to six withdrawals per month from a savings account, though this rule has become less common. Check your bank's policy before you open the account if frequent withdrawals matter to you.

Frequently Asked Questions

Can I open a high-yield savings account if I don't have a bank account already?

Yes, but you'll need a way to make your first deposit. Some online banks accept mailed checks, and some credit unions accept cash deposits in person. Once you have money in the account, you can transfer it to another bank if you open one later. Call the bank before you explore to confirm they accept checks or cash for new accounts.

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

Your rate will change, but not automatically or when ready. Banks decide when and by how much to adjust their rates. Some banks move quickly when rates go up; others move slowly. This is why checking a bank's history matters — banks that raised rates quickly in the past are more likely to do so again.

Is my money safe in a high-yield savings account?

Yes, as long as the bank has FDIC insurance or the credit union has NCUA insurance. Your deposits are protected up to $250,000 per account, per bank. If you have more than $250,000, you can open accounts at different banks to keep all your money insured. You can check whether a bank is insured on the FDIC or NCUA website.

Can I have more than one high-yield savings account?

Yes. Some people open accounts at multiple banks to earn slightly different rates or to keep their money organized by purpose — one account for emergencies, one for a vacation, one for a down payment. Each account earns interest separately, and each is insured separately up to $250,000.

Do I need to use the same bank for checking and savings?

No. Many people keep their checking account at a traditional bank with branches and their savings account at an online bank with a higher rate. You can transfer money between them whenever you need to. The only inconvenience is logging into two different banks, but most people find the higher interest rate worth it.