Updated September 9, 2023

Best 5% High-Yield Savings Accounts for September 2023

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Climb the savings ladder fast with top 5% interest savings accounts.

Best High-Yield Savings Accounts with 5% Interest

Why do credit unions offer higher rates than traditional banks?
Credit unions are run by their members so they're less focused on profit, and more focused on customer satisfaction.

How much do you earn with a 5% savings account?

A 5% APY savings account can quickly grow your money, especially with compounding interest. Use this calculator to see just how much you will earn.

5% Interest Calculator

Here's a table of how much you would have with 5% interest and different monthly contributions.

Monthly contribution1 year3 years5 years
$1,000 Initial Deposit
$5,000 Initial Deposit
$10,000 Initial Deposit
$20,000 Initial Deposit

Can you lose money in a 5% savings account?

You cannot lose money in a 5% savings account as long as the bank is insured by FDIC (or NCUA for credit unions). With FDIC insurance, your money is protected by the federal government up to $250,000 per depositor, even if the bank closes.

But if you have more than $250,000, anything over that amount is not guaranteed. So if you have a lot to save, it's best to split them into different savings accounts.

Another instance where you can lose money is by failing to meet any minimum balance requirements. In that case, you may have to pay a monthly fee.

Note that in a savings account, the APY is not guaranteed. So that 5% interest rate today could drop at any time. You will won't lose money, but you may no longer earn at that high rate.

Pros and Cons of a 5% APY savings account

Here are the pros and cons of a 5% interest rate savings account:


  • Earn more in the short-term
  • Risk-free investment
  • Funds are liquid - you can access them at any time
  • Quick and easy to open
  • Savings are FDIC insured up to $250,000


  • APY is subject to change at any time
  • Usually offered by online-only banks
  • Usually limited to 6 withdrawals per month
  • Some accounts may have requirements to earn the highest APY (or there's a cap)

Alternatives to 5% savings accounts

There are other types of accounts offering 5% APY that may fit your needs more. Here are some alternatives:

Certificate of Deposit:
A CD gives you a fixed interest rate for a fixed term. Typically, longer terms will have higher APYs. CDs are a better option if you're saving for long-term goals and want to lock in a guaranteed high APY.

The catch is that you must deposit a fixed amount of money, and you can't add to it. You also can't withdraw early or else there will be penalties.

This is a type of low-risk investment. It's basically a loan to the government or a company, and you get regular interest payments. When your bond matures, you get back the money you initially invested.

For an easy way to invest in bonds, check out Worthy Bonds. It offers 5%+ fixed interest with no fees, and you can withdraw at any time without penalty.

You can also buy bonds from the US Treasury. But those usually take 20-30 years to mature, and there are penalties if you cash out early.

Is a 5% Savings Account Right for Me?

A high-yield savings account is good for emergency funds and short-term goals (like vacation, wedding, or house down payment). Your money is not locked in, so you can access it when you need it. And there's no risk of losing money.

You'll want to look at the requirements of each account. Some accounts give you the APY on the entire balance, while others have requirements or a cap. So if you want to save big, look for an account that fits how much you plan to put in.

Also, weigh the opportunity cost. Consider what else you can do with the funds. If you don't need access and can afford some risk, there could be alternative investments that could provide a better return.

Bottom Line

A 5% savings account is a great option if you're looking for a place to park your money. It will boost your savings quickly with practically no risk.

Just be careful that some accounts may have requirements to earn the 5%. So make sure you can comply with them, and you should be growing your money in no time!

Write to Katarina Rodriguez at feedback@creditdonkey.com. Follow us on Twitter and Facebook for our latest posts.

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Editorial Note: Any opinions, analyses, reviews or recommendations expressed on this page are those of the author's alone, and have not been reviewed, approved or otherwise endorsed by any card issuer.

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