A high-yield savings account, or high-interest savings account, is a type of savings account that pays well over the average. Most high-interest savings accounts come from online banks and come with additional perks like no recurring fees, no minimum balance, and the ability to add funds and withdraw from your account online or with an app.

If you want to earn more and spend less with your savings, which is the right choice, here’s what to look for in a high-yield savings account and some of the best places to find one.

What to Look For in a High-Yield Savings Account

High-yield savings accounts are about making money while keeping your money safe. At some of the biggest banks in the United States, you’ll get as little as 0.01% in interest. That’s earning 1¢ on $100.00 per year! To go any lower, they would have to add another zero on the wrong side of the decimal point. And the average rate in the U.S. is also very low, 0.06% (6¢ on $100.00) as of this writing.

High-interest savings accounts currently offer around 0.60% to 1.5%, with some even above 2%. And the best accounts don’t charge any monthly fees, have no minimum balance requirements, and make online banking and self-service easy.

Don’t pay to let a bank hold on to your hard-earned money. They should pay you! While 2% interest isn’t much, it’s still 200 times better than 0.01% interest.

The Best High-Yield Savings Accounts

While there are a growing number of excellent savings accounts that meet our criteria of matching low costs and high-interest rates, here’s a list of favorites you should consider. Keep in mind that interest rates can change often, so double-check the website of the bank to confirm the annual percentage rate (APY).

1. Wealthfront Cash Account

Wealthfront is a popular robo-advisor, but the company has branched out to other financial services.

One of these services is the Wealthfront Cash Account. This account currently pays an impressive 2.55% APY. There aren’t any fees, and you can easily transfer funds between your cash account and investment accounts. You also get a debit card that provides free withdrawals at 19,000+ ATMs and makes daily spending easier.

And since Wealthfront works with numerous partner banks, you get up to $1 million in FDIC coverage compared to the normal $250,000 that is FDIC insured at other banks.

Get Started With Wealthfront | Wealthfront Cash Review

2. Current

With Current, you can earn 4% APY on up to $6,000 in cash without paying any monthly fees or worrying about minimum balance requirements. This is one of the best high-yield savings account rates out there right now, and the lack of requirements and fees is what makes Current so enticing.

When you open a Current account, you can deposit up to $2,000 into three different savings pods. You earn 4% APY on all your pods, and having separate pods is useful if you want to save for different goals. And Current also comes with other perks like a teen bank account option, a cash-back rewards debit card, and free ATM withdrawals at 40,000+ AllPoint ATMs.

Get Started With Current | Current Bank Review

3. BrioDirect

BrioDirect is known for its competitive interest rates, and its high-yield savings account is an excellent place to stash your emergency fund or some extra cash. And unlike some accounts that have low limits on interest-earning cash, BrioDirect doesn’t have one. All you have to do is open an account with a $500 minimum deposit and you’re off to the races. And there aren’t any monthly fees either.

There are other accounts like a high-yield money market account and high-yield CDs you can explore as well. But for a simple yet competitive savings account, BrioDirect is an excellent place to start.

Get Started With BrioDirect

4. Ally Bank

Ally Bank Online Savings is one of our favorites because of its reasonable rates, great features, and excellent customer service.

The bank charges no recurring fees and currently features a 1.75% APY. Ally is one of the top online banks with excellent checking and investing accounts too.

Useful tools like savings round-ups and automatic transfers also help you budget and save, and you can create up to 10 buckets to set money aside for specific goals.

Get Started With Ally | Ally Bank Review

5. Capital One

Capital One’s 360 Performance Savings has no recurring fees and offers a 1.30% APY rate. And it’s also an excellent online bank for checking. Plus, you get perks like free withdrawals from 70,000+ Allpoint and MoneyPass ATMs.

Overall, Capital One is a high-tech bank with great add-on tools and mobile app features. And the company has plenty of other features, like rewards credit cards, that you can take advantage of.

Get Started With Capital One 360 | Capital One 360 Review

6. Discover Bank

Like other popular high-yield savings accounts, Discover’s Online Savings Account currently offers a 2.15% APY; much higher than the national average of around 0.06% APY.

This bank dropped all fees on all accounts in 2019, which makes it another excellent no-fee high-yield savings account you can consider. There’s no minimum balance requirement either, and you can open an account within a few minutes.

Get Started With Discover | Discover Bank Review

7. SoFi

SoFi started as a student loan company and quickly expanded also to offer banking, investing, and lending. In fact, it has an incredibly popular robo-advisor service, active investing account, and even a rewards credit card.

And with the SoFi Money account, you get a hybrid checking and savings account with a whopping 2.50% APY as of this writing. Plus, you get up to $300 in free cash when you sign up and set up direct deposit.

Like the others on this list, you won’t run into minimum balance requirements or fees with this account. You can also get paid up to two days early and earn up to 15% cash back if you use the SoFi debit card.

Get Started With SoFi | SoFi Automated Investing Review

8. Juno (Juno)

While Juno doesn’t offer a true high-yield savings account, its checking account offers a comparable bonus rate. Right now, Juno lets you earn an impressive 2.15% APY bonus rate; better than many traditional brick-and-mortar banks. There aren’t monthly fees either, and you get access to 80,000+ fee-free ATMs.

Plus, if you want to invest in crypto, Juno is one of the best online banking solutions out there. Customers can buy several popular cryptos like Bitcoin and Ethereum through the app. Plus, you get up to 10% back in crypto for spending at five of your favorite brands from a list of select partners. And there are passive rewards as well since Juno pays 3% APY on Bitcoin and Ethereum you hold and 6% APY on USDC.

Get Started With Juno | Juno Review

9. Aspiration Spend & Save

While Aspiration offers a cash management account and isn’t technically a high-yield savings account, it had to make the cut for this list. With its Spend & Save account, you can earn an astonishing 5% APY on up to $10,000 with its premium plan. And even the standard plan, which uses a pay what you want model, lets you earn up to 3% APY on that amount of cash.

There are some catches to be aware of however. You have to spend at least $1,000 per month to unlock the 3% or 5% APY rate for either plan. Funds over $10,000 earn 0.10% APY with the premium plan. If you don’t meet the spending requirement for the premium plan, funds earn 0.25% APY up to $10,000 and 0.10% APY on additional cash. And the standard plan doesn’t pay any interest if you don’t meet the spending requirement.

Aspiration has plenty of other perks as well. For example, you can earn up to 10% cash back for shopping at ESG-friendly companies. And it also has a new rewards credit card that pays up to 1% cash back on everyday spending and plants a tree everytime you make a purchase.

Get Started With Aspiration | Aspiration Review

10. Varo

Varo is a newer bank that runs primarily through the Varo mobile app. The Varo Savings account features an incredibly potential APY of up to 5.0% if you complete a few steps.

You start by earning 2.00% APY on your Varo Savings account balance. There’s no minimum balance requirement to earn this rate. And if you get direct deposits of at least $1,000 and don’t have more than $5,000 in your savings account, you can earn 5.0% APY.

This is a bit of a different system, but it makes Varo an excellent high-yield savings account for a small emergency fund or stash of cash. And this bank doesn’t charge maintenance fees or withdrawal fees at 55,000+ Allpoint ATMs.

Get Started With Varo | Varo Review

11. CIT Bank

CIT Bank offers two high-yield savings accounts: its Savings Builder Account and the Savings Connect account. There’s a $100 minimum to open each account, and the Savings Builder pays up to 1.00% APY while Savings Connect pays 2.70% APY.

You have to open an eChecking account with CIT Bank to use its Savings Connect account, which is the main catch. But the Savings Builder still offers a competitive rate, although you need to either maintain a balance of at least $25,000 or have monthly deposits of at least $100 to keep your rate.

But with no account maintenance fees or opening fees, CIT Bank definitely has two of the top high-yield savings accounts out there.

Get Started With CIT Bank | CIT Bank Review

How Do High-Yield Savings Accounts Work?

The national average APY, which stands for annual percent yield, is about 0.06% for savings accounts. This is very low, especially when you consider the impact of inflation on your money.

With high-yield savings accounts, you can typically earn much more than this. In fact, accounts paying 5 to 20 times higher APYs or even higher aren’t uncommon.

When you make a deposit in your high-yield savings account, your money begins earning interest. Banks generally pay interest monthly, although some pay quarterly. The interest you earn gets added to your account, and next month, you earn slightly more because of the power of compound interest.

How to Choose the Right High-Yield Savings Account

There are numerous factors you should consider when shopping around for a high-yield savings account:

1. APY: Of course, the APY of a savings account should be one of the first factors you look at so you know how much interest you can earn.
2. Minimum Deposit Requirements: These days, many banks have a $0 deposit requirement. But some high-yield savings accounts require a certain deposit amount to unlock the highest APYs.
3. Fees: Monthly maintenance fees or various hidden fees can significantly reduce how much money you actually earn per month. So, look for high-yield savings accounts with low or no fees.
4. Promotions: If you’re opening a new bank account, you might as well try and score some free cash for your efforts. Many banks offer cash bonuses for new customers, although you usually have to deposit a certain amount of money or set up direct deposits from your paychecks.
5. Changing Rates: APY rates change all the time, so keep researching options periodically to see if there’s somewhere better to hold your extra cash.

Are High-Yield Savings Accounts Safe?

One advantage of high-yield savings accounts is that they are very safe. Money is generally FDIC-insured up to $250,000 if you’re using a bank. However, you still need to protect your personal information and login credentials and monitor your account for fraudulent transactions.

What Can You Use a High-Yield Savings Account For?

You can use a high-yield savings account for several purposes like:

• Storing money in an emergency fund
• Saving up for a vacation or short-term expense
• Keeping money on the side for investing later on
• Saving for a larger purchase

Just avoid thinking of high-yield savings accounts as long-term investments. These accounts are often used as short-term investments since they provide fixed income and don’t risk losing capital. But in the long run, it’s hard to outpace inflation with most high-yield savings accounts.

Don’t Settle for High Fees or Bad Rates

There are plenty of banks thrilled to take your money, charge you fees, and pay you nearly nothing while they lend it out for a significant profit. While some of those banks may be a good investment, they are not a great place for your savings. For emergency funds and long-term savings goals, high-yield savings accounts are the best place to store your cash.