A savings account is a good place to keep money safe and liquid, but it’s not a great place to earn money, right? Not necessarily. Some banks and credit unions offer savings accounts with respectable interest rates that rival the rates earned with CDs—but without the restrictions.
We review more than 150 banks and credit unions every weekday to find the best savings rates and deals. These high-interest savings accounts are available to customers nationwide, and your funds are federally insured up to $250,000 per depositor per institution. We start by finding the highest rates, and we favor accounts with low minimum deposit requirements and friendly fee structures.
We also include money market accounts if they function like savings accounts. That means if an account pays a high yield and doesn’t allow you to write checks, it’s in the mix.
We evaluate savings accounts that are widely available throughout the U.S. to identify the best high-interest savings accounts. For this round-up, we primarily look at the annual percentage yield (APY) offered, but to help you compare options, we also consider factors like how quickly interest compounds, how easily you can make deposits, and customer service availability.
APYs are changing rapidly amid widespread uncertainty about the economy and financial markets. The Balance is monitoring rates and updating them accordingly.
Best High-Yield Savings Accounts
|Bank or Credit Union||APY||Requirements|
|Varo||0.81%||$0 to open and earn stated APY|
|Sallie Mae Bank||0.80% on the first $10,000||$0 to open and up to $10,000 to earn stated APY; over $10,000 to earn 0.55%|
|Customers Bank||0.80%||$25,000 to open and earn stated APY|
|Fitness Bank||0.70%||$100 to open, earn stated APY, and avoid $10 monthly fee; must also average at least 12,500 steps daily|
|CFG Bank||0.68%||$1,000 to open and avoid $10 monthly fee and $25,000 to earn stated APY|
|SFGI Direct||0.67%||$500 to open and $1 to earn stated APY|
|Affirm||0.65%||$0 to open and earn stated APY|
|TAB Bank||0.65%||$0 to open and $1 earn stated APY|
|ConnectOne||0.65%||$2,500 to open and earn stated APY|
We partnered with the following banks to bring you the savings account offers in the table below. Under that, you'll find additional details on our editors' picks for the best high-interest savings accounts and rates as of January 15, 2021. All of the banks and credit unions listed are insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA).
Founded in 2015, Varo claims to be the first U.S.-based fintech company to receive a national bank charter. Through the FDIC-insured Varo Bank, it offers a basic bank account along with an online checking account and savings account. The savings account comes with no minimums or fees. Interested is compounded daily and credited monthly.
No minimum opening deposit or ongoing balance requirements
Automatic savings feature
Not suitable for those who need a more robust suite of banking services
SmartyPig is an online savings account offered through Sallie Mae Bank. The innovative account lets you create and track savings goals and requires no minimum deposit or ongoing balance. Competitive interest rates help you grow your money even faster. You’ll earn the highest interest rate on deposits up to $10,000; rates decrease as you deposit more. Interest is compounded daily and credited monthly.
No balance requirements or monthly fees
You can set up and save for individual goals
No other account offerings but the savings account
Tiered interest rate structure that offers lower rates on higher balances
Customers Bank was formed in 2009. Its personal account offerings include checking, savings, and money market accounts, as well as loans. The Money Market Savings Account is available online (but not in Alaska, Arizona, Hawaii, or New Mexico), and with no monthly fees. But the account requires at least $25,000 to open, and you stop earning interest if your balance drops below that amount. Interest compounds and is credited monthly.
Competitive rates with no monthly fees
No interest earnings if your balance falls below $25,000
Lower minimums available elsewhere
FitnessBank is an online division of Newton Federal Bank that rewards you based on your fitness activity. You’ll earn the max APY if you log an average of at least 12,500 steps daily with your Fitbit, Apple Health, Garmin, or Google Fit fitness tracker. Lower rates are available with lower activity levels, and you must open the FitnessBank app at least monthly to log your steps. The account requires a minimum of $100 to open, and you must maintain at least that much as an average daily balance to avoid a $10 monthly maintenance charge. Interest compounds daily and is credited monthly.
Decent interest even if you don't hit 12,500 steps daily
Seniors can earn the top APY with fewer steps
Mobile app doesn’t include deposit feature
CFG Bank, founded in 1927, pays its best APY in the Online CFG High Yield Money Market Account. The website is not as functional or informative as some of the largest online banks, but if you prioritize high rates over the user experience, CFG might deliver what you need. The account requires $1,000 to open and avoid a monthly fee, but you must maintain a minimum daily balance of at least $25,000. Interest compounds daily and is credited monthly.
Competitive CD rates complement the savings account
Website has limited information and features
SFGI Direct is an online division of Summit Community Bank, which is part of a $2.4 billion bank holding company. It keeps things simple with a single offering: an online savings account. The account requires $500 to open, but you earn that rate on balances of at least $1, so you don’t need to be timid about spending your money when you need it. There’s no monthly maintenance charge for this account, and interest compounds daily (with monthly crediting).
No fees or lower rates if you draw down your account
No checking or money market account for spending
Founded in 2012, Affirm is a fintech company known primarily for issuing point-of-sale loans for retail purchases through Cross River Bank. However, it also offers a high-yield savings account that comes with a companion mobile app and no minimum deposit or monthly fees. Interest is compounded daily and credited monthly.
No minimum opening deposit or ongoing balance requirements
Great for mobile-centric users
Account only accessible via the mobile app
TAB Bank began in 1998 with a focus on the transportation industry. The High-Yield Savings account has no minimum initial deposit, and you earn the highest rates at TAB Bank with just $1 in your account. There are no monthly fees, and you can open a variety of other accounts at the bank: Checking, money market, CDs, and business bank accounts are all available.
No minimum deposit required to start saving
Full range of accounts available
Earn the same or more at other banks
ConnectOne Bank began with a focus on serving businesses in 2005. Branches are located in New York and New Jersey, but you can open accounts online, including a high yield online savings account. That account requires $2,500 to open, and you need to keep at least that much in your account to earn the advertised rate. There’s no monthly fee, and you can find a broad variety of other products and services at ConnectOne. Interest in the savings account compounds daily and is credited monthly.
No monthly fees
Mobile account tools, including check deposit
Comparable rates available elsewhere with smaller balances allowed
What Is a High-Interest Savings Account?
A high-interest savings account, also known as a high-yield savings account, helps you grow your money while keeping it accessible. Savings accounts often pay interest on your deposits, but interest rates vary from bank to bank. What makes high-interest accounts unique is a relatively high rate on your balance: Top rates on these accounts are often 20 or more times the national average savings rate, multiplying your earnings.
As you earn interest on your savings, you can leave the money in your account and allow the funds to compound. Put another way, you earn interest on the interest payments you received in previous months. The higher your rate, the faster your money grows.
What Should You Look for in a High-Yield Savings Account?
The interest rate is the feature that most people pay attention to when shopping for a high-yield savings account. Compare banks and pick a competitive rate, but don’t ignore other critical features.
- Low fees are crucial: If you’re paying monthly maintenance fees, you might wipe out any earnings in your account (or even see your account balance fall each month).
- Verify that your money will be safe: Banks should be FDIC-insured, and the safest credit unions provide NCUSIF coverage.
- Select a bank that will be convenient to work with. Evaluate how you’ll use the account, and find a bank that fits your needs. For example, if you want to deposit checks frequently, make sure the bank offers mobile deposit. If you withdraw cash regularly, choose a bank with a convenient ATM network or ATM rebates.
Why Do Savings Account Rates Change?
The interest rate on your savings account changes over time. In some cases, the rate remains the same over extended periods. But when rates in the broad economy change, banks typically move in sync with those changes. If the Fed cuts rates, there’s a good chance that your savings account rates will remain stagnant or fall. When rates rise, banks tend to increase rates, but not necessarily as quickly as you’d like.
CDs enable you to lock in a rate that doesn’t change, but there are pros and cons of using CDs.
Why Are Some Bank Interest Rates Higher Than Others?
How much interest you earn can vary quite a bit, but interest rates tend to be lower at big brick-and-mortar banks and higher at online banks.
Banks raise rates when they want to gather money. If they need to get deposits in the door, a high rate on savings accounts attracts customers. If, on the other hand, they don’t need cash, they can keep rates lower.
Banks have different approaches to earning money. Some take deposits and lend them out, while others take a more varied approach (earning revenue and fees from other services like credit cards and ancillary business).
Organizational structure is also important. Some banks have shareholders demanding that the bank grow (and/or share income with the shareholders), and those demands may make it harder to pay high rates to depositors. However, some banks are able to keep only what they need to pay the bills and share the rest of the revenue (from loans, ATM fees, etc.) with account holders. Small banks and credit unions are most likely to fit the latter model.
Is Savings Account Interest Taxable?
Interest you earn in your savings account is generally taxable as income. Your bank typically reports your earnings on Form 1099-INT, and you should provide that information to your tax preparer or include it with your tax filings.
Keep an eye out for a 1099-INT in the mail during tax season. You may also be able to download the form through your online banking portal. But in many cases, banks do not provide a 1099-INT unless you earn at least $10 during the year.
With individual accounts, joint accounts, and other taxable accounts, you’ll pay tax on the interest you receive as income for the year. But if your account is part of a retirement account like an IRA, you may be able to postpone or avoid taxation on that interest.
Federal Deposit Insurance Corporation (FDIC). "Weekly National Rates and Rate Caps - Weekly Update." Accessed Jan. 15, 2021.