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Published: Nov 18, 2022 16 min read
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A high-yield savings account offers interest rates up to 25x times higher than a traditional savings account, making it an excellent place to keep your short-term savings for that new computer or long-term goals, including a down payment fund or a vacation account.

Read our list of the five best high-yield savings accounts for 2022, and learn the importance of APYs, minimum deposit and withdrawal options.

Our Top Picks for the Best High-Yield Savings Accounts

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Best High-Yield Savings Accounts Reviews

Each company’s annual percentage yield (APY) is accurate at the time of this publication, but they may vary according to the rates set by the Federal Reserve. None of our top picks have a monthly maintenance fee.

Pros
  • 3.00% APY
  • No fees whatsoever
  • No initial deposit or minimum balance requirement
  • Ranked 1st in J.D. Power's 2021 Direct Banking Satisfaction Study
Cons
  • No cash deposits or withdrawals
  • No ATM access for standalone savings account

While best known for its credit card, Discover offers an online high-yield savings account that checks all the boxes. With high interest rates and no fees, Discover Online Savings is an easy choice for our overall best savings account.

Discover has $0 in monthly maintenance fees, no minimum initial deposit requirements and no minimum balance. Interest is compounded daily and paid monthly, and customers can manage their accounts with their mobile phones via the Discover app, which includes a mobile deposit feature. You can also integrate your savings with other Discover bank accounts.

In terms of customer satisfaction, Discover ranks 1st in JD Power’s 2022 Direct Banking Satisfaction Study.

Pros
  • Highly competitive APY of 2.75%
  • Multiple online tools to boost savings
  • Ranks 3rd in J.D. Power's 2022 Direct Banking Satisfaction Study
  • Mobile check deposit via mobile app
Cons
  • No cash deposits
  • No ATM withdrawals

Ally’s online high-yield savings account is ideal for customers comfortable banking entirely online who want a high APY (2.75%) and no monthly service fees.

The account is easy to set up and has convenient tools to boost savings, including customizable savings goals (“buckets”), which help you save for goals inside your online savings account.

Customers can check balances and complete other tasks using Amazon’s Alexa. Ally bank offers mobile check deposits through its mobile app, too.

Ally has free ATM access at multiple locations with the Allpoint ATM network, and retail bank customers can speak with a representative over the phone 24/7.

Pros
  • No maintenance fees
  • Access to a high-yield savings calculator
  • Online check deposit
  • Competitive 0.85% APY
Cons
  • Requires $25,000 monthly balance or $100 monthly deposits to earn the highest rate

CIT Savings Builder is a good option for customers who want to stick to a monthly savings plan. The Savings Builder account pays 1.00% APY but, to qualify, you must maintain a minimum balance of $25,000 or commit to depositing $100 each month.

Customers must also keep track of CIT’s Evaluation Period and Evaluation Day Calendar to meet these requirements, but if they miss the cutoff date in one cycle, they can always qualify in the next one.

Pros
  • 2% APY
  • No maintenance fees
  • Minimum deposit of $5 establishes membership
  • Membership includes discounts on insurance, financial products
Cons
  • No ATM card offered
  • Mobile app offers no financial planning tools

PenFed’s Premium Online Savings Account features competitive APYs and no fees. Credit Unions usually have a membership requirement, and in this case, you need to make a $5 deposit to become a credit union member.

Open the high-yield online savings account and use the PenFed app to transfer funds between accounts, although check deposits must be made by mail.

This account is entirely online, but if necessary, customers can also find in-person service at one of the many physical branches available nationwide.

Pros
  • Earns up to 5% APY, the highest among competitors
  • Interest is compounded daily and paid monthly
  • Useful savings tools available through mobile app
Cons
  • Highest APY only available for balances up to $5,000
  • Highest APY requires having both a checking and savings account

Varo’s high-yield savings account stands out for its tiered APY program. Customers can benefit from the highest rate advertised (5.00%) by opening a Varo checking account and depositing at least $1,00 each month. Additionally, they must make a minimum of five monthly purchases with their ATM card.

Varo bank also offers a set of useful online saving tools. Save Your Pay automatically transfers funds by taking a percentage of your paycheck, while Save Your Change rounds up checking account transactions and transfers the difference to savings.

Other High-Yield Savings Accounts We Considered

High Yield Savings by Axos Bank

Pros
  • $0 monthly maintenance fee
  • Checking account ATM can be used to withdraw funds from savings
  • No minimum balance required
Cons
  • Highest APY requires a checking account
  • 0.61% APY is lower than other competitors
  • Minimum opening deposit of $250 required

Marcus by Goldman Sachs

Pros
  • Earn up to 2.50% APY
  • No fees and no minimum deposit
  • No monthly balance minimum
Cons
  • No cash deposits
  • No check-writing ability

Vio Bank

Pros
  • Earns up to 1% APY
  • No monthly fees
Cons
  • $100 minimum to open
  • No debit card or checks offered

Barclays Online Savings

Pros
  • Earn up to 3.0% APY
  • No monthly maintenance fees
  • No minimum balances to open
  • Tools to help you save
Cons
  • Barebones mobile app, only good for reviewing account balances and transferring funds
  • Savings tool has limited functionality, only accessible through website

Synchrony High Yield Savings

Pros
  • Earn up to 3.0% APY
  • No minimum balance requirement
  • Access your money online, by phone, or via ATM
Cons
  • Requires "Diamond" status in their rewards program to waive all additional fees
  • No physical branch locations

High-Yield Savings Accounts Guide

High-yield savings accounts are relatively easy to understand, but they share many characteristics with other bank products. Read on to find out what makes these accounts different from the rest.

What is a high-yield savings account?

High-yield savings accounts, also known as high-interest rate savings accounts, are bank accounts that earn you higher APY than a traditional savings account. When it comes to saving, a higher interest rate means a better return on your money.

How does a high-yield savings account work?

By offering a higher interest rate than traditional savings accounts, high-yield savings accounts help you grow your money in a shorter span of time. This type of account also limits the ways in which you can access your money, so you’re less likely to stray from your savings goals.

These limitations are not the same for every high-yield savings account and some banks do allow you to order checks or request a debit card to allow easier access to your funds.

Why open a high-yield savings account?

High-yield savings accounts are a great alternative to traditional savings accounts due to their higher interest rates. They’re particularly useful if you have short- to medium-term savings goals, such as saving for college, a new car, or a new house.

Of course, high-yield savings accounts can also serve as a replacement for a traditional savings account. Considering their higher interest rates, they’re a great tool for putting away any surplus cash that you might not want in your checking account.

How to open a high-yield savings account

You can apply to open a savings account online, by phone or, if the bank has brick-and-mortar branches, in person. Be sure to have your personal information ready, as most banks will ask you for some, if not all, of the information below.

  • Full name
  • Address
  • Email address
  • Mother’s maiden name
  • Your occupation
  • Whether or not you plan to use the account for international transactions
  • Where deposits will come from, e.g., personal income or inheritance
  • Annual household income
  • Phone number
  • Date of birth
  • Social Security number
  • Driver’s license number or information from another government-issued photo ID
  • Banking information for making transfers to your new savings account

After you’ve filled out the required information, you’ll likely be asked to agree to terms and conditions. (You should read this and related account documents to find out specifics on rates or fees.) Banks will usually ask you to agree to receive documents electronically, too.

You may be approved for a savings account within minutes. However, in some cases, it can take a few business days to receive notice from the bank regarding your application.

How to pick a high-yield savings account

Given that the main selling point of a high-yield savings account is its higher interest rate, a high APY should be the main factor to consider when shopping around.

However, like with any other type of bank account, you also want to make sure that there are few, if any maintenance fees (to avoid cutting into your interest earnings).

FDIC or NCUA insurance is also a must, which protects your money if your bank or credit union should fail (bankruptcy or insolvency).

Annual Percentage Yield

The annual percent yield (APY) is the calculation of how much interest is earned over a year, taking into account the effects of compound interest.

Because compound interest takes effect multiple times in a year (typically daily or monthly), the amounts earned through APY are slightly higher than the advertised interest rate. For example, a simple or nominal interest rate of 1% on a $1,000 balance would earn you $10 every year.

If you add monthly compounding interest — meaning the 1% interest applies every month instead of at the end of the year — your yearly return would be $10.05, giving you an effective APY of 1.005%.

APY rate stability

Typically, interest rates change depending on the federal funds rate set by the Federal Reserve. Banks use this to calculate the annual percentage yield (APY) for savings and investment products. When choosing a high-yield savings account, you want to find one that offers an APY greater than the national average 0.05% that you would earn in a standard savings account. Online banks and credit unions typically provide far higher interest rates on savings accounts than brick-and-mortar banks since they pay less overhead than banks with a physical branch.

Few to no administrative fees

High-yield savings accounts can come with monthly maintenance fees or requirements to maintain a minimum balance. Some accounts require you to maintain a minimum balance that would earn you at least one cent each month based on the APY. With other banks, you might not have to pay a monthly maintenance fee, but there may be additional fees such as ATM fees, overdrafts and wire transfer fees that you might need to pay.

FDIC/NCUA Insurance

Money in an online bank or any type of bank is secure as long as the bank is FDIC insured, meaning that the Federal Deposit Insurance Corporation backs it. Most high-yield savings accounts are FDIC-insured up to $250,000.

How much does a high-yield savings account earn?

True to their name, high-yield savings accounts have higher interest rates than a traditional savings account. These rates are usually 10 to 20 times higher than the average rate for savings accounts.

As of October 17, 2022, the national rate for savings accounts is 0.21%, according to the FDIC. However, many banks are offering rates much higher than this.

High-yield savings accounts from Discover, for example, offer an annual percentage yield (APY) of 2.75%. With a balance of $5,000, that APY would earn you $137.35 annually.

What is the difference between a high-yield savings account and a money market account?

While high-yield savings accounts and money market accounts are both types of high-interest savings accounts with comparable rates, they have a few key differences. Check the table below to compare the common features of each. Some differences, however, will vary by bank.

High-yield savings accounts Money Market accounts
Access to funds Electronic transfer, in person at branches. Few banks offer ATM access or debit cards. Checks, debit card, electronic transfer, ATM withdrawal, in person at branches
Minimum balance requirement Usually none Generally yes — varies by bank
Maintenance fees Usually none Generally yes — varies by bank

High-Yield Savings Account Glossary

  • Annual Percentage Yield (APY) - APY is the effective rate of return on your investment after factoring in the effects of compound interest.
  • Interest - Simply put, interest is the amount of money that a bank pays its customers for the privilege of holding their money. It is usually expressed as a percentage of the amount that each individual customer has deposited.
  • Compound interest - You can think of compound interest as “interest on your interest.”
  • Money market account - Money market accounts are similar to high-yield savings accounts, but aimed at businesses. They are more likely to allow for debit cards and checks, particularly for individual employees who need to access business funds regularly.
  • ACH transfer - An ACH transfer is an electronic transfer of funds from one bank to another. The ACH stands for “automated clearing house,” referring to the network that manages these transfers.
  • Savings account - A type of bank account with higher interest rates than a checking account. They’re designed to help you put away extra funds for emergencies or short-term purchase goals.
  • High-yield savings account - A type of savings account with a higher interest rate than a traditional savings account. They’re meant to help you build funds for short- or medium-term purchase goals, such as a new car, college or even a new home.
  • Checking account - A type of bank account designed for everyday spending. They allow for checks and debit cards. The interest rates offered by these accounts are typically the lowest.

Latest News About High-Yield Savings Accounts

Interest rates for high-yield savings accounts have gone up in recent months, with some financial institutions offering annual percentage yields of 3% and up. The rate spike is also related to the raising of interest rates by the Federal Reserve. To better understand why we’re seeing some of the best rates in years, read our story on current high savings rates.

If you’re still on the fence about it, you can also read our article on why you should open a high-yield savings account sooner rather than later.

Best High-Yield Savings Accounts FAQ

What is a high-yield savings account?

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High-yield savings accounts are deposit accounts that pay higher interest rates than standard savings accounts, with some offering rates up to 25 times higher than the Fed national bank average. Although it is possible to find this type of financial product at traditional brick-and-mortar banks, online banks offer the highest savings account rates.

How to pick a high-yield savings account?

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When looking for the best high-yield savings account to fit your needs, the two most important factors should be a high APY and few or no fees. However, it is also important that your chosen bank is accessible — usually through mobile apps and 24/7 customer service — and insured by the FDIC (or NCUA for credit unions).

What are the best high-yield savings accounts?

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The best high-yield savings accounts combine a high APY with few to no maintenance fees. This helps keep more money in your account month-to-month and allows you to make the most of compounding interest. For example, Discover's high-yield savings account has a consistently high APY compared to many competitors and charges zero fees across the board (overdraft, maintenance, etc.)

How often do high-yield savings accounts pay interest?

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While it varies from bank to bank, most high-yield savings accounts pay out their interest at the end of each month. However, the compounding period (when interest is calculated) can be daily, weekly or monthly.

What is the difference between a high-yield savings account and a traditional savings account?

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A high-yield savings account has a higher interest rate than regular savings accounts rates, often up to 25x higher. The average savings account pays a 0.07 percent annual percentage yield (APY). Even with the current low rates, high-yield accounts rates are around 0.50%.

Can you lose money with a high-yield savings account?

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If your high-yield savings account does not grow at the same rate as inflation, you will lose money in the sense that the purchasing power of your savings will diminish. High-yield savings accounts can also make you lose money if you don't keep track of maintenance and service fees, and you wind up paying more than what you're earning.

How We Chose the Best High-Yield Savings Accounts

Competitive annual percentage yield rates

  • Companies must offer competitive rates and have a solid history of high APY rates.
  • The annual percentage yield for most high-yield savings accounts at the moment is between 0.40% to 0.50%.

Ease of use and accessibility

  • User-friendly mobile app and easy-access online platforms
  • Transparency with crucial information and terms and conditions
  • Accounts with mobile accessibility were rated higher than those without
  • Options to withdraw or deposit their money by electronic transfers, wire transfers, mailed checks or linking to external checking accounts
  • ATM withdrawal options are a plus. Most online banks require that you open a checking account with them to access your money from an ATM.

Maintenance fees or account balance requirements

It is not in your best interest to sign up with an institution that will charge a handful of fees. We prioritized companies with:

  • No maintenance fees
  • No minimum deposit requirements
  • None or minimal balance fees
  • None or low minimum balance requirements
  • Free online transfers

Customer experience

We recognize that direct banking customers should be familiar with online and mobile platforms, but customer support must be readily available when needed. The best online savings account offered chat, phone, email support, and some even guaranteed 24/7 customer support.

Strong financial standing

Your financial institution of choice should have a strong financial rating from a reputable credit rating agency. S&P Global Ratings, Moody’s, and Fitch Group are known as The Big Three in the industry, and you can search their databases for information on the bank of your choice.

Our Top Picks also had to be insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). The FDIC covers up to $250,000 per depositor, per ownership category, per FDIC-insured institution.

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Summary of Money’s Best High-Yield Savings Accounts of 2022