A savings account is a good place to keep money safe and liquid, but it’s not a great place to earn money, right? Not necessarily. Some banks and credit unions offer savings accounts with respectable interest rates that rival the rates earned with CDs—but without the restrictions.
We review more than 150 banks and credit unions every weekday to find the best savings rates and deals. These high-interest savings accounts are available to customers nationwide, and your funds are federally insured up to $250,000 per depositor per institution. We start by finding the highest rates, and we favor accounts with low minimum deposit requirements and friendly fee structures.
We also include money market accounts if they function like savings accounts. That means if an account pays a high yield and doesn’t allow you to write checks, it’s in the mix.
We partnered with the following banks to bring you the savings account offers in the table below. Under that, you'll find our editors' picks for the best high-interest savings accounts and rates as of July 7, 2020. All of the banks and credit unions listed are insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA).
We evaluate savings accounts that are widely available throughout the U.S. to identify the best high-interest savings accounts. For this round-up, we primarily look at the annual percentage yield (APY) offered, but to help you compare options, we also consider factors like how quickly interest compounds, how easily you can make deposits, and customer service availability.
APYs are changing rapidly amid widespread uncertainty about the economy and financial markets. The Balance is monitoring rates and updating them accordingly.
Best High-Yield Savings Accounts
|Bank or Credit Union||APY||Requirements|
|SmartyPig||1.25% on the first $2,500||$0 to open and up to $2,500 to earn stated APY; up to $10,000 to earn 1.15%; up to $50,000 to earn 1.00%; over $50,000 to earn 0.95%|
|CFG Bank||1.25%||$1,000 to open and avoid $10 monthly fee and $25,000 to earn stated APY|
|Customers Bank||1.25%||$25,000 to open and earn stated APY|
|Vio Bank||1.21%||$100 to open and $0 to earn stated APY|
|Citi Bank||1.20%||$0 to open and earn stated APY but $500 to avoid $4.50 monthly fee|
|First Foundation Bank||1.20%||$1,000 to open and $0 to earn stated APY|
|SFGI Direct||1.16%||$500 to open and $1 to earn stated APY|
|CIBC USA||1.15%||$1,000 to open and $0 to earn stated APY|
|CFG Bank||1.15%||$1,000 to open and $1,000 to earn stated APY|
|Ally Bank||1.10%||$0 to open and earn stated APY|
Here's more information about the banks offering the best savings account rates right now.
SmartyPig has just one product: an online savings account offered through Sallie Mae Bank. The innovative account lets you create and track savings goals and requires no minimum deposit or ongoing balance. Competitive interest rates help you grow your money even faster. You’ll earn the highest interest rate on deposits up to $10,000. Interest is compounded daily and credited monthly.
No balance requirements or monthly fees
You can set up and save for individual goals
No other account offerings but the savings account
Tiered interest rate structure that results in lower rates on higher balances
CFG Bank, founded in 1927, pays its best APY in the Online CFG High Yield Money Market Account. The website is not as functional or informative as some of the largest online banks, but if you prioritize high rates over the user experience, CFG might deliver what you need. The account requires $1,000 to open and avoid a monthly fee, but you’ll earn a smaller APY at that level. For the highest rate, you must maintain a minimum daily balance of at least $25,000. Interest compounds daily and is credited monthly.
Competitive CD rates complement the savings account
Website has limited information and features
Customers Bank was formed in 2009. Its personal account offerings include checking, savings, and money market accounts, as well as loans. The Money Market Savings Account is available online, with no monthly fees. But the account requires at least $25,000 to open, and you stop earning interest if your balance drops below that amount. Interest compounds and is credited monthly.
Competitive rates with no monthly fees
No interest earnings if your balance falls below $25,000
Lower minimums available elsewhere
Vio Bank is the online division of MidFirst Bank. The High Yield Online Savings account requires $100 to open. There are no monthly fees if you use online statements, and customer service is available into the evening hours (as late as 9 p.m. Central on weekdays). If you need to spend your money, your account balance can fall to zero, and you still don’t pay monthly fees. Interest is compounded daily and credited monthly.
Customer service by phone seven days per week
No monthly fees, regardless of balance
No checking accounts available
Citi is a global financial services powerhouse that traces its roots back to the War of 1812 (when it was City Bank of New York). Today it offers banking services to businesses and individuals—including savings accounts. Big, well-funded banks like Citi don’t often offer rates on par with offerings from regional banks and credit unions. This account offers a competitive APY with no minimum deposit, although you’ll have to keep at least $500 in the account to avoid a $4.50 monthly fee. Interest is compounded daily and credited monthly.
No minimum deposit
Linking your savings account to another Citi account earns extra Citi rewards points
Monthly fee if account balance falls below $500
Ability to earn more interest at other banks
First Foundation Bank was founded in 1990 and has branches in California, Nevada, and Hawaii. The online savings account at First Foundation Bank pays its customers the highest APY on balances up to $5 million, and there are no monthly fees. To open an account, however, you must start with $1,000 in new money.
First Foundation Bank also offers checking accounts and other products, but those are only available in the three states mentioned (the savings account is available nationwide). Interest compounds daily and is credited monthly.
No monthly fees, even if your account balance dwindles
Limited offerings unless you live in select states
SFGI Direct keeps things simple with a single offering: an online savings account. The account requires $500 to open, but you earn that rate on balances of at least $1, so you don’t need to be timid about spending your money when you need it. SFGI Direct is an online division of Summit Community Bank, which is part of a $2.4 billion bank holding company. There’s no monthly maintenance charge for this account, and interest compounds daily (with monthly crediting).
No fees or lower rates if you draw down your account
No checking or money market account for spending
Based in Chicago, CIBC U.S. is an indirect, wholly-owned subsidiary of the Canadian Imperial Bank of Commerce (CIBC). It offers wealth management and small business and personal finance products and services. Its high-yield online savings account can be opened with as little as $1,000 and requires no ongoing balance or monthly maintenance fees. Interest is compounded and credited monthly.
No balance requirements or monthly fees
Mobile app for on-the-go account management
Can earn similar rates at other banks with a lower opening deposit
Ally Bank is an online-only bank that dates back to 1919, when it began as GMAC in New York, Detroit, Chicago, San Francisco, and Toronto. Its original purpose was to help car dealerships finance their inventories and to offer financing to customers. Over time, GMAC’s offerings expanded beyond auto financing, and in 2009, it changed its name to Ally. Today, it offers checking and savings accounts, CDs, investment accounts, as well as home and auto loans. Its high-yield savings account has no minimum deposit, ongoing balance, or monthly fee. Interest is compounded daily and credited monthly.
No balance requirements or monthly fees
Account offers savings buckets that let you save for specific goals
You can earn higher rates at other banks
What Is a High-Interest Savings Account?
A high-interest savings account, also known as a high-yield savings account, helps you grow your money while keeping it accessible. Savings accounts often pay interest on your deposits, but interest rates vary from bank to bank. What makes high-interest accounts unique is a relatively high rate on your balance: They may pay several times more than the national average, which multiplies your earnings.
As you earn interest on your savings, you can leave the money in your account and allow the funds to compound. Put another way, you earn interest on the interest payments you received in previous months. The higher your rate, the faster your money grows.
What Should You Look for in a High-Yield Savings Account?
The interest rate is the feature that most people pay attention to when shopping for a high-yield savings account. Compare banks and pick a competitive rate, but don’t ignore other critical features.
- Low fees are crucial. If you’re paying monthly maintenance fees, you might wipe out any earnings in your account (or even see your account balance fall each month).
- Verify that your money will be safe. Banks should be FDIC-insured, and the safest credit unions provide NCUSIF coverage.
- Select a bank that will be convenient to work with. Evaluate how you’ll use the account, and find a bank that fits your needs. For example, if you want to deposit checks frequently, make sure the bank offers mobile deposit. If you withdraw cash regularly, choose a bank with a convenient ATM network or ATM rebates.
Why Do Savings Account Rates Change?
The interest rate on your savings account changes over time. In some cases, the rate remains the same over extended periods. But when rates in the broad economy change, banks typically move in sync with those changes. If the Fed cuts rates, there’s a good chance that your savings account rates will remain stagnant or fall. When rates rise, banks tend to increase rates, but not necessarily as quickly as you’d like.
CDs enable you to lock in a rate that doesn’t change, but there are pros and cons of using CDs.
Why Are Some Bank Interest Rates Higher Than Others?
How much interest you earn can vary quite a bit. According to the FDIC, the average APY across all savings accounts is just 0.09%. While interest rates tend to be low at the biggest brick and mortar banks, some banks (including many online ones) offer rates around 2%.
Banks raise rates when they want to gather money. If they need to get deposits in the door, a high rate on savings accounts attracts customers. If, on the other hand, they don’t need cash, they can keep rates lower.
Banks have different approaches to earning money. Some take deposits and lend them out, while others take a more varied approach (earning revenue and fees from other services like credit cards and ancillary business).
Organizational structure is also important. Some banks have shareholders demanding that the bank grow (and/or share income with the shareholders), and those demands may make it harder to pay high rates to depositors. However, some banks are able to keep only what they need to pay the bills and share the rest of the revenue (from loans, ATM fees, etc.) with account holders. Small banks and credit unions are most likely to fit the latter model.
Is Savings Account Interest Taxable?
Interest you earn in your savings account is generally taxable as income. Your bank typically reports your earnings on Form 1099-INT, and you should provide that information to your tax preparer or include it with your tax filings.
Keep an eye out for a 1099-INT in the mail during tax season. You may also be able to download the form through your online banking portal.
With individual accounts, joint accounts, and other taxable accounts, you’ll pay tax on the interest you receive as income for the year. But if your account is part of a retirement account like an IRA, you may be able to postpone or avoid taxation on that interest.
In many cases, banks do not provide a 1099-INT unless you earn at least $10 during the year.
State of Connecticut Department of Banking. "ABCs of Banking." Accessed March 12, 2020.
Federal Deposit Insurance Corporation (FDIC). "Weekly National Rates and Rate Caps - Weekly Update." Accessed March 12, 2020.
Board of Governors of the Federal Reserve. "Changes in Monetary Policy and Banks' Net Interest Margins: A Comparison across Four Tightening Episodes." Accessed March 12, 2020.
National Credit Union Administration. "What Is a Credit Union?" Accessed March 12, 2020.
Internal Revenue Service. "Topic No. 403 Interest Received." Accessed March 12, 2020.
Internal Revenue Service. "Instructions for Forms 1099-INT and 1099-OID (2020)," Accessed March 12, 2020.