Where to find a high yield savings account

High yield savings accounts are offered by online banks, some traditional banks with online divisions, and a few credit unions. The banks that pay the highest rates tend to be online-only operations because they have lower overhead costs than brick-and-mortar branches. You will not find the highest rates at your local bank branch — the rate spread between a traditional bank and an online bank can be 4 to 5 percentage points.

The accounts themselves work the same way everywhere: you deposit money, earn interest monthly, and can withdraw funds. The difference is the rate you earn and the fees charged. Because rates change weekly based on Federal Reserve decisions and bank competition, this guide names specific banks but does not list their current rates — you will need to check their websites directly to compare what they are paying today.

Key Takeaways

  • Online banks consistently offer higher rates than traditional banks because they have fewer physical locations and lower operating costs.
  • Rates change frequently and vary between banks, so comparing current rates on each bank's website is necessary before opening an account.
  • All deposits in FDIC-insured accounts are protected up to $250,000 per depositor per bank, so account safety does not depend on which bank you choose.
  • Some online banks require a minimum deposit to open an account, while others have no minimum, so read the account terms before you start.
  • You can move money between a high yield savings account and a checking account at the same bank, but transfers to other banks may take one to three business days.

Online banks with high yield savings accounts

Online banks that currently offer high yield savings accounts include Marcus by Goldman Sachs, Ally Bank, American Express Personal Savings, Discover Bank, Synchrony Bank, and Capital One 360. These banks have no physical branches and conduct all business online or by phone. Most have no monthly fees, no minimum deposit requirements, and allow unlimited transfers between your savings and checking accounts at the same bank.

Each bank's website shows the current rate, any minimum deposit, and the terms for withdrawals. Some online banks limit how many times per month you can transfer money out of savings (though federal rules changed in 2020 to allow unlimited transfers). Read the specific account agreement before opening, because terms differ between banks even when the rate is the same.

Online banks are FDIC-insured, meaning your deposits are protected up to $250,000 per account owner per bank. If you have more than $250,000 to save, you can open accounts at multiple banks to keep all your money insured.

Traditional banks with online high yield savings options

Some large traditional banks now offer high yield savings accounts through their online divisions. Chase, Bank of America, Wells Fargo, and Citibank all have online savings products, though their rates are typically lower than online-only banks. These accounts let you link to a checking account at the same bank and move money between them instantly.

The advantage of using a traditional bank's online savings account is convenience if you already have a checking account there and use their branches or ATMs. The disadvantage is that you will earn less interest. The rate difference can add up to hundreds of dollars per year on a large balance.

Credit unions with high yield savings accounts

Some credit unions offer high yield savings accounts, though fewer than banks do and rates vary widely. Credit unions are member-owned, not shareholder-owned, so they may prioritize member returns over profit. However, credit union rates are not consistently higher than online banks — you need to check what your specific credit union offers.

To open an account at a credit union, you must be a member, which usually requires living or working in a specific area or belonging to a may have access to group. If you already belong to a credit union, ask whether they offer a high yield savings account and what the current rate is. If you do not belong to one, you can search for credit unions in your area using the CO-OP Network locator or the Alliant Credit Union website, which allows membership from anywhere in the United States.

What to compare when choosing a bank

The interest rate is the most important factor, but it is not the only one. Compare the current rate, any monthly fees, minimum deposit requirements, and how you can access your money. Some banks charge fees if your balance drops below a certain amount, while others have no minimums at all.

Check whether the bank allows transfers to external accounts (accounts at other banks) and how long those transfers take. Most online banks process external transfers in one to three business days. Also verify that the bank is FDIC-insured by searching the FDIC's Bank Find tool on their website — this protects your money if the bank fails.

If you plan to move money frequently between banks, choose one with no transfer limits and fast processing times. If you plan to deposit money and leave it alone, the rate and fees matter more than transfer speed.

How to open an account

Opening an account online takes 10 to 20 minutes. You will need a government-issued ID, your Social Security number, and proof of address (a recent utility bill or bank statement). Most banks verify your identity instantly using information from credit bureaus, so you can start using the account the same day.

Some banks require an initial deposit before the account opens, while others let you open it first and deposit later. Check the bank's website for their specific process. Once your account is open, you can transfer money from another bank account or deposit a check by mail if the bank offers mobile check deposit.

Moving money between banks

If you already have a high yield savings account at one bank and want to move your money to another bank with a higher rate, you can transfer the funds electronically. External transfers typically take one to three business days. Some banks offer a service called ACH transfer, which is free and takes this timeframe. A few banks offer faster transfers for a fee, but this is rarely worth the cost for a savings account.

You do not have to close your old account when you move money to a new one. You can keep both accounts open and move money between them as rates change, though managing multiple accounts requires more attention.

Frequently Asked Questions

Is my money safe in an online bank?

Yes, if the bank is FDIC-insured. All deposits up to $250,000 per account owner are protected, whether the bank has physical branches or not. Check the FDIC Bank Find tool to confirm your bank is insured before opening an account.

Can I withdraw money from a high yield savings account anytime?

Yes, you can withdraw money anytime without penalty. However, transfers to other banks may take one to three business days to process. If you need cash immediately, you can use an ATM at the same bank if they have one, or transfer to a linked checking account at the same bank, which is usually instant.

What happens if a bank fails?

The FDIC takes over the bank and transfers your deposits to another FDIC-insured bank. You keep your money up to the $250,000 limit. This process usually takes a few days, and you can access your funds during the transfer.

Do I have to keep a minimum balance?

Most online banks have no minimum balance requirement. Some traditional banks require $500 to $2,500 to open an account or to earn the advertised rate. Check the specific account terms on the bank's website before opening.

Can I have multiple high yield savings accounts?

Yes. Each account at a different bank is insured separately up to $250,000, so you can open accounts at multiple banks if you have more than $250,000 to save. You can also open multiple accounts at the same bank, though each one counts toward the $250,000 insurance limit at that bank.