The best high-yield savings accounts December 2023

Methodology

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Our team of experts analyzed hundreds of data points and then used data-driven methodology and thorough fact-checking to come up with the best high-yield savings accounts. We heavily emphasized APY because maximizing earnings is the most important feature of high-yield savings accounts. You can read more about our methodology below.

UFB Secure Savings

Best for customer ratings

Varo Savings Account

Laurel Road High Yield Savings

Best for full banking experience

Popular Direct High-yield Savings Account

Bask Bank Interest Savings Account

Best for no minimum deposit

TAB Bank High Yield Savings

Best for range of products

First Foundation Online Savings Account

Salem Five Direct eOne Savings

Synchrony Bank High Yield Savings

Betterment Cash Reserve

Our picks at a glance

Why is now a good time to open a high-yield savings account?

• Earn interest: The best high-yield savings accounts offer an APY of more than 5.00% right now, which will allow your savings to grow quickly. For example, if you deposit $10,000 into an account that earns 5.00% APY and compounds monthly, you’ll have $11,049.41 in two years if the APY stays the same.
• Keep your money safe: As long as your financial institution is insured by the Federal Deposit Insurance Corp. (FDIC) or National Credit Union Administration (NCUA), your funds will be safe up to the coverage limits, even in the event of a bank collapse.
• Flexible access: While many high-yield savings accounts limit the number of withdrawals you can make per month, your savings are still much more liquid than a certificate of deposit (CD) or investing in the stock market, for example.

What are high-yield savings accounts?

They’re savings accounts that give you much better-than-average interest rates on your money, resulting in high APYs. It’s worth noting that there are no meaningful differences between a savings account and a high-yield savings account, so you should look at the account names interchangeably when comparing APYs.

As of October 2023, the average APY for all types of US savings accounts was 0.46%, according to the FDIC. However several high-yield savings accounts offered rates of 5.00% and higher. Many of the best rates are offered by online-only banks because they have much lower operating costs than traditional, brick-and-mortar banks, allowing them to offer high APYs to attract customers.

Why should you consider high-yield savings accounts?

The main reason to consider a high-yield savings account is to get a better return on your money than you would with other types of deposit accounts, allowing you to grow your wealth a lot faster.

High-yield savings accounts are also worth considering if you are saving toward a specific goal such as an emergency fund or down payment on a new home. You not only earn high interest — you also have a single, convenient place to add to your savings.

What to consider when choosing a high-yield savings account

The same basic rules apply to choosing a high-yield savings account that apply to any other bank account: It all comes down to your financial goals. Here are a few things to consider:

• Interest rate: You want to look not only at the rate currently being offered but also how long it lasts. In some cases what you see on a bank’s website is a promotional rate that might expire after six months or so, then drop down to a lower rate.
• Initial deposit: Some banks require a deposit to open a high-yield checking account. These often range from $5 to $100, but some accounts have much higher minimum deposits.
• Minimum balance: Read the fine print to learn the minimum balance to avoid service fees.
• Fees: Many high-yield savings accounts have no fees, but some do. Make sure you know the fee structure before opening an account. If an account has a monthly maintenance fee, you can expect it to range from $5 to $20.
• Compounding interest: Before opening the account, find out whether interest is compounded daily, monthly or yearly. This can make a big difference in how quickly you grow your money.

Online bank vs. traditional bank high-yield savings accounts

The main difference between online banks and traditional banks is that with the former, all of your business is conducted digitally, either on a website or app. With most traditional banks, you have the choice of banking online or in person at a branch. Some online banks are stand-alone startups with little more than a digital platform and a single account, while others are digital subsidiaries of larger banking companies.

Because online banks don’t have to invest large sums of money in labor, real estate or physical operations, they can afford to offer higher interest rates and lower fees than traditional banks. The downside is that you might not find as many products at online banks and you don’t have the option of in-person service.

The one thing you want to make sure of when considering an online bank is whether it is insured by the FDIC. The FDIC covers most online banks because otherwise, they would have difficulty competing for business. Before opening a high-yield savings account with an online bank — or any bank, for that matter — the FDIC recommends ensuring that it’s a legitimate FDIC-insured bank instead of a fraudulent website trying to bilk you out of your money, which you can do with the FDIC’s BankFind tool.

Pros and cons of high-yield savings accounts

No bank account offers everything, and that’s the case with high-yield savings accounts as well. Here’s a look at some of their strengths and weaknesses:

Pros

• High APYs compared to other types of deposit accounts
• Low fees (at least with online-only banks)
• High returns without high risks

Cons

• APY can change at any time
• Stricter requirements than traditional savings accounts at some banks
• High opening deposit and/or minimum balance requirements for some accounts
• Not ideal for daily banking, especially since many high-yield savings accounts are stand-alone and can’t be bundled with a checking account

Maximizing your high-yield savings account

To get the most out of your high-yield savings account, the first thing you want to do is ensure the rate is competitive with the best in the industry. This will require comparing different accounts at different banks. Next, double-check the fine print regarding how long the rate lasts, what the minimum deposit and balance requirements are, how often interest is compounded and whether your deposits are FDIC-insured.

When it comes to fees, you want to make sure you pay as little as possible. Here are some different fees to keep an eye on:

• Monthly service fees that kick in if you don’t meet minimum balance or other requirements.
• Inactivity fees for not making any deposits or withdrawals over a certain period.
• ATM fees for using machines outside of the bank’s network.
• Excessive withdrawal fees if the bank limits your savings account withdrawals per month.

How to open a high-yield savings account

The specific process of opening a high-yield savings account depends on the account and the bank. You can usually find the requirements and instructions on the app or website. Here’s what most banks require when opening a new account:

• Proof of ID: You’ll need to provide some kind of documentation establishing your identity, such as a driver’s license or government-issued ID, Social Security number, ITIN or bill with your name and address on it. If you apply in person at a branch you can bring your documents with you. If applying online, you’ll be asked to provide the information digitally.
• Application: This varies from one bank to the next, but you typically have to provide information such as your full name, address and Social Security number or ITIN. Some applications can be approved immediately while others might take a few days.
• Opening deposit: This almost always involves transferring money into the new high-yield savings account from another account. However, if you open an account at a traditional bank branch, you might be able to make the opening deposit in cash.

In most cases, you’ll have the option of choosing how to receive account statements, set up account alerts and automatic deposits and link your high-yield savings account to other accounts.

Alternatives to high-yield savings accounts

The purpose of high-yield savings accounts is to give you the biggest return possible with a savings account, but it’s not always the best option. For example, when the Federal Reserve raises interest rates (like it did in 2022 and 2023) you can get bond yields that are competitive with the best high-yield savings accounts — with the bonus of having the rates locked in for a set period.

Similarly, some money market accounts offer rates that are competitive with high-yield savings accounts while also letting you write checks. This is also the case with certain high-yield checking accounts.

CDs are a good alternative to high-yield savings accounts if you want to lock in a rate for a longer period because you can buy them for terms ranging from three months to 10 years or more.

Methodology

CNN Underscored Money analyzed 65 savings accounts from 54 financial institutions to come up with the rankings for the best high-yield savings accounts. This included accounts from a mix of traditional banks, online banks and credit unions that are available nationally. We ranked each account on nine data points across six categories.

Here are the categories we analyzed and how we weighted each:

APY (70%)

The amount of interest you earn on your savings is the most important part of choosing a high-yield savings account for many consumers, so we weighted this highest of any factor.

Fees (10%)

Fees are a critical factor to consider with your high-yield savings account because they can eat away at any interest earnings, especially if an account has a high monthly maintenance fee.

Customer experience (5%)

While you’ll likely deal with your bank less often with a high-yield savings account than you will with a checking account, it’s still important to have a bank that’s trustworthy and easy to reach when you need help.

Digital experience (5%)

You’ll want a bank with a usable app and plenty of online features so that it’s easy to bank from anywhere.

Minimum deposit requirement (5%)

A high minimum deposit makes a savings account less accessible, so we rewarded accounts that more people can use.

Minimum balance to avoid a monthly fee (5%)

A high minimum balance to avoid monthly fees limits flexibility with your savings account because you’re limited in how much you can transfer or use for unexpected expenses without being penalized by fees.

We also considered several other factors like welcome bonuses and tier structures to earn APY.

Frequently asked questions (FAQs)

How are high-yield savings accounts different from regular savings accounts?

One difference is that high-yield savings accounts can pay higher interest rates than regular savings accounts, but this isn’t always true and the two accounts are very similar. You might also see lower fees at high-yield savings accounts offered by online banks.

Are high-yield savings accounts safe?

As long as the account is offered by an FDIC member institution, it protects your money like any other FDIC-insured account. This means your savings are insured up to $250,000 per depositor, per insured bank, for each account ownership category. If your high-yield savings account is offered by a credit union, your money is insured for up to $250,000 per depositor by the NCUA.

Do high-yield savings accounts have withdrawal limitations?

Under the federal government’s Regulation D, all savings accounts let you withdraw or transfer money up to six times a month without paying any fees. Although this regulation was indefinitely suspended during the Covid-19 pandemic, many banks still impose the six-withdrawal limit.

Are there penalties for closing a high-yield savings account?

Some banks might charge a fee if you close a savings account soon after opening it, but it’s up to the individual bank. There is no specific industry regulation imposing penalties for closing a high-yield savings account.