Article updated on Sep 27, 2024
Why You Can Trust CNET Money
Our mission is to help you make informed financial decisions, and we hold ourselves to strict . This post may contain links to products from our partners, which may earn us a commission. Here’s a more detailed explanation of .
Toni Husbands Staff Writer Toni Husbands is a staff writer with CNET Money who enjoys exploring topics that promote financial wellness. She began writing about personal finance to document her experience paying off $107,000 of debt, which is detailed in her book, The Great Debt Dump. Previously, she contributed as a freelance writer for websites, including CreditCards.com, Centsai and Wisebread. She was also a regular contributor to Business AM TV, and her work has been featured on Yahoo News. Being a part-time real estate investor and amateur gardener also brings her joy.
David McMillin writes about credit cards, mortgages, banking, taxes and travel. Based in Chicago, he writes with one objective in mind: Help readers figure out how to save more and stress less. He is also a musician, which means he has spent a lot of time worrying about money. He applies the lessons he's learned from that financial balancing act to offer practical advice for personal spending decisions.
Edited by
Kelly is an editor for CNET Money focusing on banking. She has over 10 years of experience in personal finance and previously wrote for CBS MoneyWatch covering banking, investing, insurance and home equity products. She is passionate about arming consumers with the tools they need to take control of their financial lives. In her free time, she enjoys binging podcasts, scouring thrift stores for unique home décor and spoiling the heck out of her dogs.
Article updated on Sep 27, 2024
Written by Toni Husbands Staff Writer Toni Husbands is a staff writer with CNET Money who enjoys exploring topics that promote financial wellness. She began writing about personal finance to document her experience paying off $107,000 of debt, which is detailed in her book, The Great Debt Dump. Previously, she contributed as a freelance writer for websites, including CreditCards.com, Centsai and Wisebread. She was also a regular contributor to Business AM TV, and her work has been featured on Yahoo News. Being a part-time real estate investor and amateur gardener also brings her joy. David McMillin writes about credit cards, mortgages, banking, taxes and travel. Based in Chicago, he writes with one objective in mind: Help readers figure out how to save more and stress less. He is also a musician, which means he has spent a lot of time worrying about money. He applies the lessons he's learned from that financial balancing act to offer practical advice for personal spending decisions.
Edited by Kelly is an editor for CNET Money focusing on banking. She has over 10 years of experience in personal finance and previously wrote for CBS MoneyWatch covering banking, investing, insurance and home equity products. She is passionate about arming consumers with the tools they need to take control of their financial lives. In her free time, she enjoys binging podcasts, scouring thrift stores for unique home décor and spoiling the heck out of her dogs.
CNET staff -- not advertisers, partners or business interests -- determine how we review the products and services we cover. If you buy through our links, we may get paid.
Reviews ethics statementA high-yield savings account is a federally insured account to store your cash that will earn an annual percentage yield several times higher than the average savings account. Oftentimes, high-yield savings accounts are available at online-only banks or credit unions such as Ally, Alliant Credit Union or Panacea Financial that don’t maintain physical branches.
As with traditional savings accounts, high-yield savings accounts earn a variable interest rate that can change at any time, and you can deposit or withdraw money as needed. It’s always a good idea to choose a high-yield savings account that doesn’t charge a monthly service fee or require a minimum balance.
- Digital Federal Credit Union 6.17% (on balances up to $1,000) APY , $5 Min. deposit to open
- LendingClub 4.80% to 5.30% APY, $0 Min. deposit to open
- Newtek Bank 5.25% APY, $0 Min. deposit to open
- My Banking Direct 5.00% APY, $500 Min. deposit to open
- BrioDirect Bank 5.15% APY, $5,000 Min. deposit to open
- Bread Savings 5.15% APY, $100 Min. deposit to open
- Bask Bank 5.10% APY, $0 Min. deposit to open
- EverBank 5.05% APY, $0 Min. deposit to open
- TAB Bank 5.02% APY, $0 Min. deposit to open
- CommunityWide Federal Credit Union 5.00% APY, $1 Min. deposit to open
- Varo Bank 5.00% on first $5,000 (3.00% on the rest) APY, $0 Min. deposit to open
Savings account
A deposit account issued by banks, credit unions and neobanks used to store money and earn a small amount of interest. Typically, these accounts are insured for up to $250,000 per account owner, per institution.
High-yield savings account
An interest-bearing account similar to a traditional savings account that pays a much higher annual percentage yield, or APY, than the average savings account. They are also typically insured for up to $250,000 per account owner, per institution.
Certificate of deposit (CD)
A type of savings account in which a lump-sum deposit accrues interest at a fixed rate for a fixed term, usually with an early withdrawal penalty.
Money Market Account (MMA)
Similar to a savings account but with the added feature of check-writing privileges and a debit card to access cash, often with limitations on the number of monthly withdrawals.
Annual percentage yield (APY)
An interest rate that represents the return from the compounded interest you’ll earn in 12 months on your deposit. The higher the APY, the faster your money grows.
Advertiser Disclosure
CNET editors independently choose every product and service we cover. Though we can’t review every available financial company or offer, we strive to make comprehensive, rigorous comparisons in order to highlight the best of them. For many of these products and services, we earn a commission. The compensation we receive may impact how products and links appear on our site.
The rate information is obtained by Bankrate from the listed institutions. Bankrate cannot guarantee the accuracy or availability of any rates shown. Institutions may have different rates on their own websites than those posted on Bankrate.com. The listings that appear on this page are from companies from which this website receives compensation, which may impact how, where, and in what order products appear. This table does not include all companies or all available products.
All rates are subject to change without notice and may vary depending on location. These quotes are from banks, thrifts, and credit unions, some of whom have paid for a link to their own website where you can find additional information. Those with a paid link are our Advertisers. Those without a paid link are listings we obtain to improve the consumer shopping experience and are not Advertisers. To receive the Bankrate.com rate from an Advertiser, please identify yourself as a Bankrate customer. Bank and thrift deposits are insured by the Federal Deposit Insurance Corp. Credit union deposits are insured by the National Credit Union Administration.
Consumer Satisfaction: Bankrate attempts to verify the accuracy and availability of its Advertisers’ terms through its quality assurance process and requires Advertisers to agree to our Terms and Conditions and to adhere to our Quality Control Program. If you believe that you have received an inaccurate quote or are otherwise not satisfied with the services provided to you by the institution you choose, please click here.
For details on our best products and how we chose them click here.
Certificate of Deposit (CD)
A type of savings account in which a lump-sum deposit accrues interest at a fixed rate for a fixed term, usually with an early withdrawal penalty.
Checking
The core bank account used for financial transactions. Account holders use it to deposit money and withdraw funds as needed.
Savings
A deposit account issued by banks and credit unions used to deposit money and earn a small amount of interest. Typically insured for up to $250,000 per account owner.
Money Market Account (MMA)
Similar to a savings account but with the added feature of checking-writing privileges and debit card to access cash, with some limitations.
Annual Percentage Yield (APY)
A CD’s interest rate that represents the return from the compounded interest you’ll earn in 12 months on your deposit. The higher the APY, the faster your money grows.
Estimated earnings
An estimated calculation usually associated with determining how much you’ll receive from an interest-bearing account.
As expected, the annual percentage yields on some high-yield savings accounts have declined following the recent Federal Reserve interest rate cut. The average APY for savings accounts tracked by CNET is down to 4.69%, compared to 4.80% before the Fed meeting.
There are still plenty of standout savings accounts that offer APYs above 5% -- more than 10 times the national average of 0.46%.
As rates continue to fluctuate, these are the best places to start your search for a high-yield savings account. Keep in mind that savings APYs are variable, so if the Fed continues to cut rates, your APY may dip as well.
Savings accounts with 5% APY or higher
| Bank | APY | Min. deposit to open |
|---|---|---|
| Digital Federal Credit Union | 6.17% (on balances up to $1,000) | $5 |
| LendingClub | 4.80% to 5.30% | $0 |
| Newtek Bank | 5.25% | $0 |
| My Banking Direct | 5.00% | $500 |
| BrioDirect Bank | 5.15% | $5,000 |
| Bread Savings | 5.15% | $100 |
| Bask Bank | 5.10% | $0 |
| EverBank | 5.05% | $0 |
| TAB Bank | 5.02% | $0 |
| CommunityWide Federal Credit Union | 5.00% | $1 |
| Varo Bank | 5.00% on first $5,000 (3.00% on the rest) | $0 |
Rates as of Sept. 26, 2024. Rates are variable and subject to change at any time.
Digital Federal Credit Union
Primary Savings
- 4.0/5
- 6.17% (on balances up to $1,000)
- $5
4.2/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
APY APY = Annual Percentage Yield.
Min. deposit to open
The DCU Primary Savings account’s 6.17% APY tops our list of high-yield savings accounts. However, this APY only applies to balances up to $1,000. Any balance above that earns a 0.05% APY, which is less than the national average of 0.46%. We like that DCU offers mobile check deposits and has plenty of fee-free ATMs, but it doesn’t offer many perks beyond that.
The credit union has 24 branches in New Hampshire and Massachusetts, but it serves members nationwide through a network of more than 5,900 co-op shared branches. Membership is available to employees or members of partner organizations or people who live in specific communities in Massachusetts. Visit its website for eligibility requirements.
Aside from the Primary Savings account, DCU also offers several other savings accounts that may have different APYs and features. These include an Advantage Savings account and a Member Described Savings account.
- No monthly fees or minimum balance requirements
- $5 deposit required
- Mobile check deposits via app
- 80,000 fee-free ATMs nationwide
The DCU Primary Savings account’s 6.17% APY tops our list of high-yield savings accounts. However, this APY only applies to balances up to $1,000. Any balance above that earns a 0.05% APY, which is less than the national average of 0.46%. We like that DCU offers mobile check deposits and has plenty of fee-free ATMs, but it doesn’t offer many perks beyond that.
The credit union has 24 branches in New Hampshire and Massachusetts, but it serves members nationwide through a network of more than 5,900 co-op shared branches. Membership is available to employees or members of partner organizations or people who live in specific communities in Massachusetts. Visit its website for eligibility requirements.
Aside from the Primary Savings account, DCU also offers several other savings accounts that may have different APYs and features. These include an Advantage Savings account and a Member Described Savings account.
- No monthly fees or minimum balance requirements
- $5 deposit required
- Mobile check deposits via app
- 80,000 fee-free ATMs nationwide
LendingClub
LevelUp Savings
- 4.0/5
- 4.0/5
- 4.80% to 5.30%
- $0
4.2/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
Customer experience
APY APY = Annual Percentage Yield.
Min. deposit to open
LendingClub recently launched a LevelUp Savings account that rewards consistent savers with competitive rates. You’ll qualify for the highest rate if you deposit at least $250 per month. Deposits from any source -- such as direct deposit or electronic transfers -- count towards the minimum monthly requirement.
If your monthly deposit drops below $250 after the first two months, then the standard APY will apply. Both rates apply to the entire balance.
We also like that the LevelUp Savings account doesn’t charge a monthly fee or have a minimum balance requirement. Learn more about this account and its features in our CNET review.
- No monthly fees, minimum deposit or minimum balance requirements.
- Banking app supports mobile check deposits.
- Cash deposits accepted at select ATMs.
- Unlimited non-network ATM fee reimbursements.
LendingClub recently launched a LevelUp Savings account that rewards consistent savers with competitive rates. You’ll qualify for the highest rate if you deposit at least $250 per month. Deposits from any source -- such as direct deposit or electronic transfers -- count towards the minimum monthly requirement.
If your monthly deposit drops below $250 after the first two months, then the standard APY will apply. Both rates apply to the entire balance.
We also like that the LevelUp Savings account doesn’t charge a monthly fee or have a minimum balance requirement. Learn more about this account and its features in our CNET review.
- No monthly fees, minimum deposit or minimum balance requirements.
- Banking app supports mobile check deposits.
- Cash deposits accepted at select ATMs.
- Unlimited non-network ATM fee reimbursements.
Newtek Bank
Personal High-Yield Savings
- 5.0/5
- 5.25%
- $0
4.5/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
APY APY = Annual Percentage Yield.
Min. deposit to open
Newtek Bank is an online-only subsidiary of Newtek One, a financial services company. Its savings account APY applies to all balance levels, but you’re limited to six withdrawals per statement cycle. Also, the account doesn’t come with an ATM card.
You can open as many personal banking accounts as needed and manage them all through an online banking account or mobile app. But if you don’t want to manage your account online or will need to make more than six monthly withdrawals, it’s best to consider other options.
- No monthly fees, minimum deposit or balance requirements
- Mobile check deposits via app
- No service or transaction fees
- Limit of six withdrawals per statement cycle
- Live customer support available 24/7
Newtek Bank is an online-only subsidiary of Newtek One, a financial services company. Its savings account APY applies to all balance levels, but you’re limited to six withdrawals per statement cycle. Also, the account doesn’t come with an ATM card.
You can open as many personal banking accounts as needed and manage them all through an online banking account or mobile app. But if you don’t want to manage your account online or will need to make more than six monthly withdrawals, it’s best to consider other options.
- No monthly fees, minimum deposit or balance requirements
- Mobile check deposits via app
- No service or transaction fees
- Limit of six withdrawals per statement cycle
- Live customer support available 24/7
My Banking Direct
High Yield Savings Account
- 4.0/5
- 5.00%
- $500
4.5/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
APY APY = Annual Percentage Yield.
Min. deposit to open
My Banking Direct is an online service of Flagstar Bank, which is owned by parent company New York Community Bancorp. Its high-yield savings account offers the most competitive APY for all balance levels on this list. This online savings account has no maintenance fees, no minimum balance requirements and pays interest on all balances above $1. While we like that this bank offers a high APY, you’ll need at least $500 to open an account.
My Banking Direct doesn’t advertise information about wire transfer fees on its website or in its official account disclosures.
- No monthly fees or balance requirements
- $500 minimum deposit required to open an account
- $1 account balance needed to earn the highest APY
My Banking Direct is an online service of Flagstar Bank, which is owned by parent company New York Community Bancorp. Its high-yield savings account offers the most competitive APY for all balance levels on this list. This online savings account has no maintenance fees, no minimum balance requirements and pays interest on all balances above $1. While we like that this bank offers a high APY, you’ll need at least $500 to open an account.
My Banking Direct doesn’t advertise information about wire transfer fees on its website or in its official account disclosures.
- No monthly fees or balance requirements
- $500 minimum deposit required to open an account
- $1 account balance needed to earn the highest APY
BrioDirect Bank
High-Yield Savings
- 3.0/5
- 5.15%
- $5,000
3.5/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
APY APY = Annual Percentage Yield.
Min. deposit to open
BrioDirect is the online-only arm of Webster Bank, a full-service bank with over 200 branches located throughout Connecticut, Massachusetts, Rhode Island and New York City. This bank works best as a secondary savings option as it only offers a high-yield savings account and CD with terms ranging from 30 days to five years.
While the competitive rate is attractive, the highest APY only applies when you open the account with an initial deposit of $5,000 or more. However, once you’ve opened the account, you’ll continue to qualify for the best APY available as long as you maintain a minimum balance of $25. We also like that there are no monthly fees associated with this account.
- No monthly fees
- Online and mobile banking app
BrioDirect is the online-only arm of Webster Bank, a full-service bank with over 200 branches located throughout Connecticut, Massachusetts, Rhode Island and New York City. This bank works best as a secondary savings option as it only offers a high-yield savings account and CD with terms ranging from 30 days to five years.
While the competitive rate is attractive, the highest APY only applies when you open the account with an initial deposit of $5,000 or more. However, once you’ve opened the account, you’ll continue to qualify for the best APY available as long as you maintain a minimum balance of $25. We also like that there are no monthly fees associated with this account.
- No monthly fees
- Online and mobile banking app
Bread Savings
High-Yield Savings Account
- 4.0/5
- 5.15%
- $100
4.2/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
APY APY = Annual Percentage Yield.
Min. deposit to open
Formerly Comenity Direct, Bread Financial offers high-yield savings and certificate of deposit accounts through its consumer banking arm, Bread Savings. The bank requires a $100 minimum to open a savings account, but there are no monthly maintenance fees. You can make unlimited free deposits via mobile check, ACH transfer and wire transfer. Outgoing wire transfers cost $25, official check requests are $15 and paper statements are $5 per statement.
- No monthly fees
- Monitors and adjusts APYs based on market conditions to remain competitive
- Doesn’t offer ATM or debit cards with savings account
- Banking app supports mobile check deposits
Formerly Comenity Direct, Bread Financial offers high-yield savings and certificate of deposit accounts through its consumer banking arm, Bread Savings. The bank requires a $100 minimum to open a savings account, but there are no monthly maintenance fees. You can make unlimited free deposits via mobile check, ACH transfer and wire transfer. Outgoing wire transfers cost $25, official check requests are $15 and paper statements are $5 per statement.
- No monthly fees
- Monitors and adjusts APYs based on market conditions to remain competitive
- Doesn’t offer ATM or debit cards with savings account
- Banking app supports mobile check deposits
Bask Bank
Bask Interest Savings Account
- 5.0/5
- 5.10%
- $0
4.5/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
APY APY = Annual Percentage Yield.
Min. deposit to open
Bask Bank, an online subsidiary of Texas Capital Bank, has two different types of savings accounts. Its interest savings account offers a competitive APY on all balances, with no monthly fees or minimum deposit requirements. But if you’re looking to open a joint account, look elsewhere. Bask Bank doesn’t offer joint savings account options.
This bank also has a Mileage Savings Account you can explore if you like to earn American Airlines miles you can redeem for free flights. Instead of earning a cash APY on your balance, you’ll earn 2.5 AAdvantage miles for every dollar you save annually. You can open one savings account of each type.
- No monthly fees, minimum deposit or balance requirements
- Two savings account options available -- Miles Savings and Interest Savings
- Doesn’t offer ATM or debit cards with savings account
- Mobile check deposits via app
Bask Bank, an online subsidiary of Texas Capital Bank, has two different types of savings accounts. Its interest savings account offers a competitive APY on all balances, with no monthly fees or minimum deposit requirements. But if you’re looking to open a joint account, look elsewhere. Bask Bank doesn’t offer joint savings account options.
This bank also has a Mileage Savings Account you can explore if you like to earn American Airlines miles you can redeem for free flights. Instead of earning a cash APY on your balance, you’ll earn 2.5 AAdvantage miles for every dollar you save annually. You can open one savings account of each type.
- No monthly fees, minimum deposit or balance requirements
- Two savings account options available -- Miles Savings and Interest Savings
- Doesn’t offer ATM or debit cards with savings account
- Mobile check deposits via app
EverBank
Performance Savings
- 5.0/5
- 4.5/5
- 5.05%
- $0
4.8/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
Customer experience
APY APY = Annual Percentage Yield.
Min. deposit to open
EverBank, formerly TIAA, offers a high-yield savings account with a competitive APY which now applies to your entire balance. (Previously, it only applied to the first year the account was open.) The bank operates several physical branches in Florida, but its online tools and mobile app make opening and managing an account seamless from anywhere in the US. We also like that you can access your money from a network of 100,000 fee-free ATMs and get reimbursed for up to $15 a month in non-network ATM fees.
- No monthly fees, minimum balance or balance requirements
- Yield Pledge promise guarantees APYs remain competitive
- Supports mobile check deposits via app
EverBank, formerly TIAA, offers a high-yield savings account with a competitive APY which now applies to your entire balance. (Previously, it only applied to the first year the account was open.) The bank operates several physical branches in Florida, but its online tools and mobile app make opening and managing an account seamless from anywhere in the US. We also like that you can access your money from a network of 100,000 fee-free ATMs and get reimbursed for up to $15 a month in non-network ATM fees.
- No monthly fees, minimum balance or balance requirements
- Yield Pledge promise guarantees APYs remain competitive
- Supports mobile check deposits via app
TAB Bank
High Yield Savings
- 5.0/5
- 5.02%
- $0
4.5/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
APY APY = Annual Percentage Yield.
Min. deposit to open
TAB Bank, an online-only bank, offers a highly competitive APY for its high-yield savings account. There’s no minimum balance or deposit required, and you need only 1 cent in your account to start earning interest.
We also like that you can receive mobile alerts and text messages. For example, you can receive alerts about withdrawals when your account falls below a certain limit. Another benefit is that TAB has extended customer service hours -- Monday through Friday from 6 a.m. to 7 p.m. MT and Saturdays from 9 a.m. to 3 p.m. MT, excluding federal holidays.
- No monthly fees, minimum deposit or balance requirements
- $5 monthly fee for paper statements
- Full suite of deposit accounts available
- Mobile check deposits via app, plus text alerts
- Extended customer service hours
TAB Bank, an online-only bank, offers a highly competitive APY for its high-yield savings account. There’s no minimum balance or deposit required, and you need only 1 cent in your account to start earning interest.
We also like that you can receive mobile alerts and text messages. For example, you can receive alerts about withdrawals when your account falls below a certain limit. Another benefit is that TAB has extended customer service hours -- Monday through Friday from 6 a.m. to 7 p.m. MT and Saturdays from 9 a.m. to 3 p.m. MT, excluding federal holidays.
- No monthly fees, minimum deposit or balance requirements
- $5 monthly fee for paper statements
- Full suite of deposit accounts available
- Mobile check deposits via app, plus text alerts
- Extended customer service hours
CommunityWide Federal Credit Union
CW Hi-Rate
- 4.0/5.0
- 5.00%
- $1
Minimum deposit and fees
APY
Min. deposit to open
The CW Hi-Rate savings account earns a competitive APR and is available for members of Community Wide Federal Credit Union. Membership is broadly available through employer partners or by joining several local organizations.
You can access your money through one of the 5,500 CO-OP shared branches nationwide or through the mobile and online banking features. In addition to a high-yield savings account, you can also take advantage of financial counseling at no additional charge. One drawback, however, is that penalty-free withdrawals are limited to the first through the fifth day of each month. After that, you could forfeit a portion of your dividends earned with each withdrawal.
- Withdrawal penalties are charged after the 5th of each month
- Free online and mobile banking
- Mobile check deposit
Varo Bank
Online Savings Account
- 5.0/5
- 5.00% on first $5,000 (3.00% on the rest)
- $0
4.6/5
We score savings accounts based on annual percentage yields, customer experience, minimum deposits and fees. Our savings and high-yield savings account ratings are based on extensive in-house research, which evaluates features and perks, including mobile and online access and surcharge-free ATM networks.
Minimum deposit and fees
APY APY = Annual Percentage Yield.
Min. deposit to open
Varo Bank has a tiered savings rate that benefits lower balances. You’ll earn 5.00% APY on balances up to $5,000 and 3.00% APY on balances above that. But there are a few catches.
You’ll start off earning 3.00% APY. To qualify for 5.00% APY on balances of $5,000 or less, you must have $1,000 in direct deposits into your account every month, and you must end each month with a positive balance in both your Varo Bank (checking) and savings account. Qualifying direct deposits include paychecks, pensions or other government benefits such as Social Security.
While Varo presents an appealing APY for those with lower balances, any balance amount over $5,000 will earn the lower APY. However, we like that Varo offers more wiggle room to grow your stash with automatic round-ups that move your change from deposits and other transactions to your savings.
- No monthly fees, minimum deposit or balance requirements
- Mobile check deposits via app
- Roundup tools to automate savings
- Highest APY available limited to balances up to $5,000
- Minimum of $1,000 in monthly direct deposits required to earn APY
Varo Bank has a tiered savings rate that benefits lower balances. You’ll earn 5.00% APY on balances up to $5,000 and 3.00% APY on balances above that. But there are a few catches.
You’ll start off earning 3.00% APY. To qualify for 5.00% APY on balances of $5,000 or less, you must have $1,000 in direct deposits into your account every month, and you must end each month with a positive balance in both your Varo Bank (checking) and savings account. Qualifying direct deposits include paychecks, pensions or other government benefits such as Social Security.
While Varo presents an appealing APY for those with lower balances, any balance amount over $5,000 will earn the lower APY. However, we like that Varo offers more wiggle room to grow your stash with automatic round-ups that move your change from deposits and other transactions to your savings.
- No monthly fees, minimum deposit or balance requirements
- Mobile check deposits via app
- Roundup tools to automate savings
- Highest APY available limited to balances up to $5,000
- Minimum of $1,000 in monthly direct deposits required to earn APY
How to find the best savings rates
When searching for a savings account that promises competitive rates, read the fine print. Some accounts advertising exceptional rates have a tiered balance structure and apply the highest rate available only to a limited balance.
Digital Federal Credit Union, for example, applies a 6.17% APY only to accounts with balances of up to $1,000. Beyond that, your balance earns a mere 0.05% APY. Other banks may offer a competitive rate for a limited time, such as a teaser rate.
How does a 5% interest savings account work?
A high-yield savings account with a 5% APY works like most other savings accounts. You can regularly deposit and withdraw money while earning interest on your balance.
Interest represents the amount of money a financial institution will pay you in exchange for using your money to fund its lending operations. “Banks that need more deposits to feed their lending operations will be a little more aggressive in paying out to bring in deposits,” said Greg McBride, CFA and chief financial analyst for CNET sister site Bankrate.
McBride explained that smaller banks and credit unions without the marketing budget to rival more established banks compete for your dollars by offering better rates on deposit accounts. “How do you compete with the behemoth? You pay a better rate,” he said.
Interest is expressed as a percentage and calculated by multiplying the principal balance by the interest rate by a period. Compound interest adds the interest earned from the previous period to the principal balance -- thus supercharging your savings growth. The annual percentage yield, or APY, represents the actual rate of return and accounts for the effects of compounding interest.
For example, $1,000 deposited in an account that earns a 5% APY with interest compounded monthly will earn $50 in interest in one year -- assuming the APY doesn’t change.
Interest rates advertised for savings accounts are variable and can change at any time. Your actual annual yield will fluctuate if your APY changes throughout the year.
How to open a high-yield savings account
Most online banks offer high-yield savings accounts. Opening an account is a simple process. Here’s what you should expect:
- Choose an account. Before opening an account, remember to read the fine print to understand account details and any requirements to earn interest.
- Apply. Complete the application process at your chosen bank or credit union. You may also be able to do so online.
- Provide the necessary information. Provide a government-issued form of ID to verify your identity. Most banks will require your Social Security number or Individual Taxpayer Identification Number, phone number, physical address and other personal information.
- Make an initial deposit. Transfer or deposit the amount needed to fund the account.
- Activate online banking. Follow the steps provided to set up your online banking account if one is available. From there, you should be able to manage your account online and possibly via a mobile app or text messages.
Common savings account fees to avoid
Your savings account should help you save money -- whether for emergency savings, a future expense like a family vacation or to meet your holiday shopping needs. Fees work against your ability to maximize your savings. Here are some common charges associated with savings accounts that you should avoid whenever possible.
Monthly maintenance fee: This is a monthly fee some financial institutions charge for maintaining an account. Sometimes, you can have this fee waived by meeting certain criteria, such as signing up for e-Statements or direct deposit. It’s best to avoid accounts with monthly maintenance fees or those without simple options to waive the fee.
Minimum balance fee: Some savings accounts require you to maintain a minimum balance to avoid incurring a fee. You want to avoid savings accounts that charge this type of fee, especially if you struggle to maintain a certain balance in your savings account.
Excessive withdrawal fee: A Federal Reserve Board rule, Regulation D, historically limited the number of withdrawals or transfers you can make from your savings account to six per month. That rule was removed in 2020, but many banks maintain the withdrawal limit and charge a fee if you exceed it. Always track your withdrawals and note any limits in place to avoid this fee.
ATM fees: If you use an out-of-network ATM, your bank may charge you an ATM fee. If you frequently use ATMs, look for an account that offers a significant number of ATMs in your area or reimburses ATM fees.
Paper statement fee: Many financial institutions charge a fee for receiving paper statements by mail. Sign up for electronic statements to eliminate this fee.
Account closure fee: Closing your savings account within a certain window may also trigger a fee. This window is generally 90 days after opening the account or less and is in place to discourage account churning -- opening and closing accounts in rapid succession to receive new account bonuses. Note any policies regarding account closure fees before closing an account to avoid surprises.
The bottom line
A high-yield savings account that earns a 5% APY or more is an ideal option to store and grow your savings, whether to build an emergency savings fund or save for a specific goal. And since savings rates remain high, now’s a good time to maximize your interest-earning potential by switching to a high-yield savings account.
Be aware that some banks advertising the highest rates may have terms or restrictions. Pay attention to the fine print and choose the account that best serves your overall savings goals.
CNET maintains a regularly updated list of the best savings accounts and best high-yield savings accounts. Use these resources as a starting point to compare the most competitive APYs available from banks, credit unions and neobanks (newer banks that operate exclusively online or through mobile apps) that are insured by the Federal Deposit Insurance Corporation or National Credit Union Administration for up to $250,000 per person, per institution if the bank fails.
Recommended Articles
6 Best Places to Save Money and Earn Interest
6 Best Places to Save Money and Earn Interest
12 Budget Hacks to Beat Inflation
12 Budget Hacks to Beat Inflation
3 Ways to Save for Your Next Vacation While Savings Rates Are Still High
3 Ways to Save for Your Next Vacation While Savings Rates Are Still High
5 Ways I’m Thinking Differently About Saving Money
5 Ways I’m Thinking Differently About Saving Money
Methodology
CNET reviews savings accounts by comparing them across set criteria, including annual percentage yield, monthly fees, minimum deposits or balances, and access to physical branches.
We reviewed more than two dozen leading traditional banks and online financial offerings to determine our best savings accounts. Along with the aforementioned criteria, we also considered sign-up bonuses and other rewards. All savings accounts must also be insured by the FDIC.
The banks, credit unions and neobanks we reviewed include Affirm Savings, Alliant Credit Union, Ally, America First Credit Union, American Express High Yield Savings Account, Axos High Yield Savings, Bank of America Advantage Savings, Bank of the West, Bank5 Connect, Barclays, Bask Bank, Bread Savings, BrioDirect High-Yield Savings, Capital One 360 Checking, Charles Schwab, Chase Premier Savings, Chime, Citibank, Citizens Online Savings Account, Colorado Federal Savings Bank, Consumers Credit Union, Discover, First Internet Bank of Indiana, LendingClub, Live Oak Bank, M&T Bank, Marcus, My Banking Direct, Nationwide My Savings, Navy Federal Credit Union, NBKC, OneUnited Bank, PenFed CU, PNC, Popular Direct Select Savings, PurePoint Financial, Quontic Bank, Rising Bank, Salem Five Direct, Sally Mae Smarty Pig, Santander Bank, Synchrony, TAB Bank, TD Bank, TIAA Bank, Truist Bank, U.S. Bank, UFB Direct, Union Bank, USAA Bank, Varo, Vio and Wells Fargo.
Written by
Toni Husbands
Staff Writer
Toni Husbands is a staff writer with CNET Money who enjoys exploring topics that promote financial wellness. She began writing about personal finance to document her experience paying off $107,000 of debt, which is detailed in her book, The Great Debt Dump. Previously, she contributed as a freelance writer for websites, including CreditCards.com, Centsai and Wisebread. She was also a regular contributor to Business AM TV, and her work has been featured on Yahoo News. Being a part-time real estate investor and amateur gardener also brings her joy.
Written by
David McMillin
David McMillin writes about credit cards, mortgages, banking, taxes and travel. Based in Chicago, he writes with one objective in mind: Help readers figure out how to save more and stress less. He is also a musician, which means he has spent a lot of time worrying about money. He applies the lessons he's learned from that financial balancing act to offer practical advice for personal spending decisions.