Best High-Yield Savings Accounts of December 2024: Up to 5%

Best high-yield savings accounts: full list of editorial picks

When selecting the best high-yield savings accounts, NerdWallet uses multiple data points, including monthly fees, minimum balance requirements, APY, mobile app ratings and customer service availability. Click the financial institution’s name in the table below to read a full review.

What is a high-yield savings account?

A high-yield savings account is a type of federally insured savings product that earns rates that are much better than the national average. They can earn more than 5%, though most are now around 4%. By comparison, the national average rate is 0.43%.

» Looking for the top overall online-only banks? Check out NerdWallet's picks for best online banks

What is the highest-paying high-yield savings account?

Currently, the institution on our best high-yield savings account list with the highest APY is Santander Bank. Its Openbank savings account earns a 5.00% APY.

Is it worth putting money into a high-yield savings account?

Yes. With a high-yield savings account, also known as a high-interest savings account, your balance can grow faster over time than it would in an average savings account. This is without additional effort on your part. Your money is working harder for you in a higher-rate account.

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

A high-yield savings account earns a much higher rate than a regular savings account. While some traditional savings accounts, particularly those at large national banks, earn rates as low as 0.01% APY, high-yield accounts earn many times more. Currently, rates at the best high-yield accounts earn around 4% APY.

When are savings rates going to fall?

Some savings rates have dropped from their recent highs and we expect to see more dips over the coming months. The Fed kept the federal funds rate steady for over a year in an effort to tame inflation. In September 2024, after a period of decreasing inflation rates, the Fed announced a rate cut. While we expect to see dips, it’s tough to say how far or fast savings rates will drop.

Alternatives to high-yield savings accounts

High-yield savings account vs money market account

High-yield savings accounts and money market accounts are both types of savings accounts, but MMAs typically offer debit cards and checks, with the ability to make a few purchases each month. Both types of accounts generally let you link to other deposit accounts, such as checking accounts, to make electronic withdrawals and deposits. But with the added benefit of debit cards or checks, money market accounts give easier access to your funds. This can be helpful if you need fast access to your cash. However, some MMAs also charge monthly fees and have high minimum opening deposits.

» Want to explore more? See our list of the best money market accounts

High-yield savings account vs certificate of deposit (CD)

High-yield savings accounts and certificates of deposit are both federally insured deposit accounts, but CDs tend to have higher rates in return for locking in your money for a set time period. CDs are best for funds that can be put away for the entire CD term, which can typically range from a few months to five years or more. If you have a short-term savings goal for an item you’d like to purchase in a few years, consider opening a CD. Funds in high-yield savings accounts can generally be withdrawn at any time, though there may be a limit of six per month for certain types of withdrawals. Compared to a CD, a high-yield savings account is a better option for an emergency fund.

» Learn more about the best CD rates

High-yield savings account vs checking account

The difference between a high-yield savings account and a checking account is that a high-yield savings account is used for building your account balance, while a checking account is used for everyday spending. Some checking accounts earn interest or offer cash-back rewards, but a high-yield savings account likely pays more interest, though it may also limit certain types of withdrawals to a maximum of six per month. » Looking for online checking? Read about the best online checking accounts

What are the benefits of the best savings account rates?

Earning more interest means your bank balance can grow faster over time. When an account earns a high rate, say 4% APY, you have the potential to earn much more than what you would in an account with an APY that earns half of a percent. (See next question for an example.)

How much will $10,000 make in a high-yield savings account?

If your money is in an account that earns a strong rate, your balance will grow faster without any additional effort on your part. With a 4% APY, a savings balance of $10,000 would earn a bit more than $400 after a year. It may not make you rich, but the earnings are much better than an account with a 0.40% APY, which would earn about $40 dollars.

How do I choose the best high-interest savings accounts?

Look for accounts that have high interest rates and low service charges. You want to make sure you don’t have to pay a fee each month. Some institutions don’t charge monthly fees, while others do but will waive them if you meet a balance minimum.

Be willing to look beyond the larger, well-known banks. Many smaller institutions — including online banks and apps — feature good rates and low deposit requirements.

» Want to explore checking accounts instead? Take a look at NerdWallet’s best checking accounts

High-yield savings accounts: Pros and cons

Here's a look at benefits and drawbacks of typical high-yield savings accounts compared with other ways to grow your funds.

High-yield savings account pros:

• Earns higher rates than other savings accounts.

• Is a deposit account, so it has federal insurance (unlike investments).

• Typically can be opened online, without the need to leave your home.

High-yield savings account cons:

• Sometimes requires a higher minimum opening balance compared with regular savings accounts.

• While they can be opened online (a pro), some are online-only, so face-to-face customer service is not an option.

The highest APY savings accounts are easy to access

With online banking, you can access your account securely day or night. Online banks, credit unions and nonbank providers offer some of the best savings rates on the market while charging fewer fees than traditional banks. They also often offer good websites and mobile apps that typically let customers deposit checks and pay bills.

How to open an account with the best interest rates

Depending on the type of financial institution, you can open an account either online or in person. You’ll need to provide your Social Security number and contact information, along with at least one form of identification, such as a driver’s license or a passport. (For a joint account, everyone wanting access to the account must provide this information and ID.) You will often be required to deposit money into the new account right away. You can do that by depositing cash or checks, or through a wire transfer.

» Find high rates across checking, savings and other accounts in NerdWallet's list of high-interest accounts

What to do if you can’t open a high-interest savings account

Occasionally, your application to open an account may not be approved. This is likely because of issues with your previous banking history.

Unpaid bank fees and bounced checks can result in a negative file on ChexSystems, a consumer reporting agency that financial institutions use to evaluate a prospective customer’s banking history.

There are options for customers who have a ChexSystems file, including opportunities to open alternative accounts. For more information, read our primer on what to do if you have a ChexSystems record.

Are high-yield savings accounts safe?

In short, yes. High-yield savings accounts at banks and credit unions are federally insured up to $250,000 per depositor, and many nonbank providers partner with banks for insurance. Accounts at banks are backed by the Federal Deposit Insurance Corp., while credit union accounts are backed by the National Credit Union Administration. This means that even if the financial institution fails, the government makes sure your money is safe and accessible. Read NerdWallet's primer on FDIC insurance to learn more.

Should I have more than one savings account?

Having multiple savings accounts can be helpful in organizing separate savings goals. For example, you could open one savings account to cover emergencies and another to save for your next vacation.

Do I have to pay taxes on my savings account?

The interest you earn in a savings account is generally taxable, according to the Internal Revenue Service. Near the beginning of the calendar year, in time to file your taxes, your financial institution may send you a form 1099-INT reporting if you earned more than $10 in interest the previous year. When you receive this form, be sure to check it against your own bank account records for accuracy. Even if you don’t receive this tax form, the IRS states that the interest you earn in any amount is taxable. Be sure to check with a tax advisor to know your reporting requirements.

High-yield savings account terminology

Here’s a look at some important savings terms to know.

Savings account: A deposit account from a financial institution that earns interest.

Money market account: A type of savings account that often offers higher interest rates in return for a steep minimum deposit. (Think $5,000 or more.)

Interest: Money a financial institution pays into an account over time.

Compound interest: Compound interest is the interest you earn on both your original money and on the interest you keep accumulating. In an account that pays compound interest, the return is added to the original principal at the end of every compounding period, typically daily or monthly. Each time interest is calculated and added to the account, the larger balance earns more interest.

Annual percentage yield: The APY, or annual percentage yield, is the amount of compound interest an account earns in a year. The calculation is based on the account's interest rate and the number of times interest is paid during the year. A savings account with the highest APY grows faster than an account with a lower yield.

» Read more about 10 essential banking terms you need to know

Why do online banks pay more interest for savings accounts?

Online banks don't have the cost of maintaining branches that traditional banks do. They are able to pass the savings on to customers in the form of better yields.

How often can I take money out of a high-yield savings account?

Financial institutions usually limit the number of certain kinds of withdrawals from any type of savings account to a maximum of six per month. These include online withdrawals, overdraft protection transfers and transfers initiated by telephone. If you have more than six transactions per statement cycle, your provider may levy an excess withdrawal fee each time you exceed the limit. However, on April 24, 2020, the Federal Reserve allowed providers to eliminate this cap. Contact your financial institution’s customer service line to find out if it has eased restrictions. If it hasn’t, keep in mind that withdrawing cash from an ATM does not count toward the limit. Read more in our primer on Regulation D.

Do the best online savings accounts have fixed rates?

No, rates are variable and can change over time. This is true for all savings accounts, whether they are online or offered by traditional banks, and whether they pay a high rate or a low one. The accounts featured in this article are among those with the consistently highest rates. But if you’re looking for a product that earns a fixed rate, and you’re willing to keep the money in the account for a set time period — without withdrawals — consider a certificate of deposit.

How often do high savings rates change?

Institutions typically don’t change savings rates hourly, daily or even weekly. It’s common to see some rates remain unchanged for several months.

But rates are variable and can theoretically change at any time. In addition, many providers will adjust their rates based on their competitors’ actions. As a result, you will often see groups of financial institutions increase or decrease their APYs around the same time, especially if the Federal Reserve recently hiked or cut rates.

Check out the best rates regularly to get the best yield for your money.

Which bank gives 7% interest on savings accounts?

The banks we have surveyed don't have rates as high as 7%, though some have rates north of 5%. When we analyze banks for this list, we look at a number of factors, including minimum balance requirements and monthly fees. Our full editorial list provides several options that earn high rates and offer a solid banking experience.

» Interested in getting money from banks? See NerdWallet's best bank account promotions and bonuses

Historical savings rates

The table below shows movement that some financial institutions have seen with savings rates over the last few months. We chose a few online institutions and two national banks to compare.

Note: Rates are accessed at the beginning of the month unless otherwise noted. Current rates may change at any time.