Key takeaways
- High-yield savings accounts often pay higher APYs than their traditional counterparts.
- Benefits of high-yield savings accounts include a low-risk way to grow your savings faster and reach your financial goals sooner.
- After five years, $10,000 in a HYSA with a 4% APY would be $12,167, compared to $10,263 in a traditional account with 0.51% APY.
Savers looking to earn more on their cash deposits might be frustrated with average yields. According to data compiled by DepositAccounts.com, the current national average yield for savings accounts is 0.51%. However, the best high-yield savings accounts (HYSAs) often offer higher rates than the national average, while maintaining protection from the Federal Deposit Insurance Corporation (FDIC).
Understanding how to make a high-yield savings account comparison can help you earn extra interest on your cash without taking on additional risk.
Top High-Yield Savings Accounts
The best high-yield savings accounts offer rates that beat the national average and give you a chance to grow your cash.
Best high-yield savings account news
Citing the need to monitor how inflation and the economy respond to tariffs, the Federal Reserve kept its benchmark rate steady following its July meeting. The federal-funds rate remains in a range of 425 to 450 basis points, where it’s been since the end of 2024.
Federal Reserve Chair Jerome Powell told reporters that the central bank will continue its cautious approach to ensure rate cuts are introduced at the appropriate time. “If you move too soon, you wind up maybe not getting inflation all the way fixed and you have to come back [and raise rates]. That's inefficient,” he said. “If you move too late, you might do unnecessary damage to the labor market.” Economic experts have pushed the next possibility of a rate cut out to September.
With rates remaining steady, it’s unlikely that savings account yields will move much in the coming weeks. However, the best high-yield savings account rates still outpace inflation, which is at 2.70%, according to the latest data from the Bureau of Labor Statistics.
What is a high-yield savings account?
Like other savings accounts, a high-yield savings account isn’t intended for day-to-day transactions like checking accounts. While checking accounts help you with activities like cash management and bill pay, savings accounts sometimes come with withdrawal limits and are primarily designed to keep money safe for future goals.
High-yield savings accounts don’t come with an official designation, though. The FDIC doesn’t recognize high-yield accounts as different from their conventional counterparts. “It’s certainly not an official term,” says Ryan Derousseau, a financial adviser at United Financial Planning Group in Hauppauge, N.Y.
Derousseau points out that the term can have different meanings for each financial institution. You can find accounts labeled “high-yield” offering annual percentage yields (APYs) that differ by a percentage point or more. If you’re looking for the best high-yield savings account rates, you might need to compare several offerings.
How do high-yield savings accounts work?
Banks, credit unions and fintech companies offer savings products with higher yields than the national average. As of July, 2025, the average savings account yield is 0.51%, according to DepositAccounts.com. The top high-yield savings accounts often have rates much higher than the national average.
When you put money in a HYSA, the financial institution has a reasonable expectation that it can use that money by lending it to others, so the institution is willing to pay you a higher-than-average APY.
For example, if you open a HYSA, the institution might offer a 4.50% APY on your money. At the same time, though, the institution might lend your money to someone else at 8.99% APR. The institution remains profitable, and you receive a higher yield as an incentive to keep your money in savings.
Depending on the financial institution, you might be limited in the number of withdrawals or transfers from the account each month. In the past, certain transfers and withdrawals were limited to six each month, but that rule was amended in 2020. However, financial institutions can create their own requirements, so you need to pay attention to the limits that your bank or credit union places on withdrawals and transfers.
What are the benefits of high-yield savings accounts?
- Higher-than-average APY: With a HYSA, you can access higher yields than you would receive with a more traditional savings account. Your money grows faster as you earn a higher rate of return, and you’re more likely to reach your financial goals sooner.
- Low-risk: High-yield savings accounts are considered low-risk. As long as your institution is backed by the FDIC or National Credit Union Association (NCUA), your cash is protected in the event of institutional failure (up to federal limits). You don’t have to worry about losing your principal due to market conditions. However, you do need to consider inflation risk.
- High liquidity: While the money in a HYSA isn’t meant for day-to-day transactions, it is easy to access when needed. It’s highly liquid, and you can usually transfer the money to another account or withdraw it quickly. If you need the money for an emergency or have met your goal and want to use it for a major purchase, there’s usually no wait to access the funds.
How to choose the best high-yield savings account
Once you decide to move your money to a savings account, it’s important to consider which is the best HYSA for your purposes.
What factors should you consider?
When making your high-yield savings account comparison, some of the most important factors to consider include:
- APY: Compare yields between accounts. Review whether you receive a different yield based on how much you have in the account. For example, some savings accounts have yield tiers. Don’t simply pick the rate at the top of an online list, says Derousseau. “You’re going to want to understand what’s required to get the rate that you’re seeing on-screen.”
- Minimum balance requirements: Some accounts require a minimum opening balance or that you maintain a minimum daily balance. Before opening a HYSA, make sure you can meet the minimum balance requirements or look for an account with no minimums.
- Withdrawal limits: Check with the financial institution to determine whether you’re subject to withdrawal and transfer limits. Pay attention to the types of permitted withdrawals and transfers to avoid potential penalty fees.
- Features and benefits: Do you want ATM card access? Would you like to be able to deposit checks remotely? Do you want an account that allows you to set up an envelope or bucket system for different savings goals? Consider the features of the account and whether they meet your needs.
- Insurance: Verify that the financial institution has the appropriate insurance. For banks, it’s FDIC insurance, and for credit unions, it’s NCUA insurance.
- Accessibility: If you prefer in-person access to your money, a local bank or credit union branch might make sense for your HYSA. On the other hand, if you don’t care about branch access, you might look for an online savings account with a good mobile app and a large fee-free ATM network.
How does APY impact your savings?
While APY is an important consideration when choosing the best high-yield savings account for your needs, it’s not the only item to consider. A higher APY can help you reach your goals faster, but switching financial institutions for a slightly higher APY might not make sense.
For example, if you have $5,000 and contribute $250 a month in a savings account yielding 3.85% and compounded daily, your total interest earned at the end of the year is $249.83. On the other hand, you find a HYSA with 4.25% APY compounded daily. At the end of a year, your total interest earned is $276.30. You might decide that the difference of $26.47 isn’t worth the trouble of moving your money to a new account.
If you’re only earning the national average, though, the switch might be worth it. At 0.51% APY compounded daily, you might only earn $32.59 in total interest for the year.
The table below reflects an initial deposit of $10,000 with no ongoing savings contributions:
Are there any fees to watch out for?
When possible, look for accounts that don’t charge fees. Some common fees you might find when comparing the top high-yield savings accounts include:
- Monthly maintenance fees: These might be waived if you meet minimum balance requirements or set up direct deposit.
- Penalty fees: If the financial institution has a withdrawal or transfer limit, you might be subject to fees if you exceed those limits.
- Statement fees: Some institutions charge fees for paper statements. Choose electronic statements to avoid these fees.
- Overdraft fees: In some cases, you might overdraw your HYSA, especially if you have an automatic transfer that exceeds your balance.
High-yield savings accounts terminology
As you compare high-yield savings accounts, the following terms can help you better understand the product:
- Principal: The original amount of money you put into a savings account.
- Interest: Money a financial institution pays you in return for keeping your money in an account and allowing it to lend to others.
- Interest rate: The rate at which you earn interest, expressed as an annual percentage of the money you keep in the account.
- Compound interest: Interest earned on the original money you deposit into an account, as well as interest earned on the interest you have accumulated. Interest is compounded at regular intervals, such as daily or monthly. Compounding interest allows you to earn interest faster because the amount earned increases as it includes interest already earned.
- Annual percentage yield (APY): The amount of interest earned in a year, including compound interest. Typically, APY is higher than the interest rate because it represents the total interest you earn.
- Savings account: Deposit account at a financial institution, designed to help consumers keep their money in one place. A savings account doesn’t usually make it easy to transact daily business, and you don’t usually receive a debit card to access a savings account.
- HYSA: “High-yield savings account” acronym. A HYSA normally pays a much higher yield than the national average.
- Money market account (MMA): Deposit account that includes some aspects of a transaction account, such as debit card access. Money market accounts typically pay a higher-than-average yield, but not as high as a HYSA. Additionally, some money market accounts require higher average balances to earn a higher yield.
High-yield savings accounts: Pros and cons
Before opening a high-yield savings account, you should understand what the potential advantages and disadvantages are.
Pros
- Higher-than-average yield: Cash doesn’t typically offer a high yield. However, a high-yield savings account provides a way to earn a relatively competitive rate on cash deposits to help you reach your goals faster.
- Protected by insurance: High-yield savings accounts are protected by federal insurance. As long as your accounts are within limits, you don’t have to worry about losing your money in a bank failure. It’s a way to earn a higher yield without putting your principal at risk.
- Easy to open online: Financial institutions providing HYSAs typically allow you to open and fund your account online in a matter of minutes. You don’t have to worry about bank hours and can manage your account online or through an app.
Cons
- Yields might not help build long-term wealth: While HYSAs offer competitive yields on cash deposits, they don’t always beat inflation. Additionally, you might not be able to meet your long-term wealth-building goals for retirement without investing in addition to keeping a portion of your cash in a HYSA.
- You might not be eligible for the advertised yield: You might not receive the highest advertised APY when you use a HYSA. Some high-yield savings accounts have higher minimum balance requirements to receive the advertised APY. Some accounts have balance tiers that impact your ability to receive the advertised yield.
- No in-person customer service: If you want to use a branch sometimes, you might not be able to when you open a HYSA. Many financial institutions offering HYSAs don’t have physical branches, so you need to rely on fee-free ATMs and bank online or via app.
Who should get an online high-yield savings account?
It might make sense to open a high-yield savings account for your emergency fund or to save for a specific goal. Many people can benefit from HYSAs for specific short-term and medium-term goals, as well as creating sinking funds or emergency funds.
However, HYSAs are generally not considered appropriate for building long-term wealth for goals like retirement. The yields paid by online high-yield savings accounts don’t usually match investments for long-term earnings.
Consider using a high-yield savings account as part of your overall financial planning strategy, using it for the cash portion of your portfolio.
Alternatives to high-yield savings accounts
You might consider other investment accounts depending on your financial goals. Some accounts have less liquidity than others, but can be a better option if you don’t need your funds right away. Others may offer higher returns if you can tolerate greater risk. Here are some of the most common alternatives to high-yield savings accounts:
- Money market accounts: Money market accounts are deposit accounts offered by financial institutions such as banks and credit unions. They are usually covered by FDIC or NCUA insurance, depending on the type of institution you use. Money market accounts also offer yields that are higher than the national average, with easy access to your funds. This can be a good option if you want to maximize your earnings while keeping cash available.
- Certificates of deposit (CDs): CDs allow you to earn a guaranteed return in exchange for keeping your money on deposit for a period of time, typically three months to five years. They’re available from banks and credit unions. You typically incur fees if you withdraw funds before the term is up, making CDs preferable if you know you won’t need to access your money sooner.
- Bonds: Bonds are issued by companies or governments. When you purchase one, you extend a loan to the issuer and collect interest payments until the bond is repaid. Unlike stocks, you don’t hold a share of ownership in the company when you buy bonds. You might choose this option if you prefer receiving regular interest payments over time.
- Investments: If you’re looking for significant returns to build wealth, investments might be a good option. Investment accounts hold stocks, bonds, cash and other funds. They can offer the highest returns, but also the most volatility.
What to do if you can’t open a high-interest savings account
If you apply for a high-yield savings account and your application is rejected, you may wonder why this happened and what you can do to improve your chances of approval next time. One likely cause of application denial could be due to your ChexSystems report. ChexSystems is a banking verification service that financial institutions use to review applicants’ checking account history from the last five years. If your ChexSystems report flags closed accounts, bounced checks, fraud or other potential problems, that can make it challenging for you to open a high-yield savings account.
To review your banking history, you can contact the company and request a free report (you are eligible for one free report every year). You can also request a free score and freeze your consumer report if needed. You don’t need to worry about your score dropping if you do this: Pulling your checking history has no impact on your credit score.
If you’re flagged by ChexSystems, you can still open a bank account. Some credit unions and banks offer options known as “second-chance checking accounts,” but these accounts often come with higher monthly fees than a traditional checking account. You could potentially switch to a regular checking account after you maintain your second-chance account for a set period of time (ranging from six months to two years).
You can also dispute your report with both ChexSystems and the bank or credit union that reported you, if you’ve been a victim of banking fraud and believe it is inaccurate. Reinvestigations typically take about a month to complete.
FAQ
What is the difference between a high-yield savings account and a traditional savings account?
The main difference between a high-yield savings account and a traditional savings account is the yield offered. Many HYSAs offer a yield that’s often much higher than a more conventional savings account.
Are high-yield savings accounts safe?
If your account is with a financial institution covered by FDIC or NCUA insurance, your money should be safe from institutional failure up to the coverage limits.
How often do interest rates change for high-yield savings accounts?
Interest rates often change according to market conditions. Some institutions update their rates every month, while others do so on a different schedule. One of the biggest impacts on HYSA yields is the federal funds rate. When that benchmark rises or falls, it often affects savings accounts.
Can I lose money in a high-yield savings account?
In general, your money is considered safe in a high-yield savings account, especially if it is protected by FDIC or NCUA insurance. The main risk to a high-yield savings account is inflation risk, if your yield doesn’t keep up with the rate of inflation.
Do high-yield savings accounts have fees?
Some accounts have fees, which might include maintenance fees, penalty fees if you exceed the transfer and withdrawal limits or fees for paper statements. Many HYSAs that charge fees also include actions you can take to waive the fees. Consider looking for a high-yield savings account that doesn’t charge fees.
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