Best High Yield Savings Accounts: January 2021

Make your money work harder for you in a high-yield savings account. Here are the top savings accounts to grow your money.

Reasons to Use a High-Yield Savings Account

A high-yield savings account is ideal for short-term goals. You can grow your money but still have access when you need it.

Here are some great uses for a high-yield savings account:

• Emergency fund
  
• Money for a house down payment
  
• Saving for a car
  
• Special events like a vacation or wedding
  
• Putting tax money away for self-employed individuals

Online banks offer much higher interest rates - as much as 20x or more than traditional big banks. That can be a difference of hundreds - or even thousands - of dollars over the years.

Top High Yield Savings

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Here is a list of the top high-yield savings accounts. Read on to find the right bank for every kind of saver.

Best High Rate: Varo Savings Account

Online Savings Account

Click Here to Get Deal

• Earn 0.40% APY
• No minimum to open
• No monthly maintenance fee
• Member FDIC

Varo offers one of the highest savings APYs currently in the nation. It offers a tiered rate. Here's how it works.

You get the base rate of 0.40% APY on all balances. Opportunity to earn 2.80% APY if your daily savings balance does not exceed $10,000 AND you make at least 5 Varo debit card purchases per month AND receive at least $1,000 in direct deposits in either the Varo Bank Account or Savings Account.

Even though there are some hoops to jump through, the exceptionally high interest rate could be worth it. There is no monthly service fee.

High Interest for Active Savers: CIT Bank

Member FDIC
CIT Savings Builder - Earn 0.45% APY
Click Here to Learn More
Earn up to 0.45% APY. Here's how it works: Maintain a minimum balance of $25k OR make at least a $100 minimum deposit every month. Member FDIC

CIT Bank's Savings Builder encourages saving by rewarding active savers with a high APY. You can earn the top tier APY when you open an account with $100, and make a deposit of $100 every month.

It offers:

• $100 minimum opening deposit
  
• Motivates you to save at least $100 every month
  
• No monthly service fee

Customer Favorite: Ally Bank

Online Savings Account - 0.50% APY
Click Here to Get Deal
$0 minimum opening deposit. No minimum balance requirement. No fees to open or maintain account.

With a user-friendly interface and live customer service, Ally Bank gets very high satisfaction ratings. It's a full-service online bank with a wide ATM network, free checking account, multiple CDs, and investment services.

Ally's online savings account offers:

• Competitive APY
  
• No minimum opening deposit
  
• No monthly service fees

Best Savings With ATM Card: Synchrony

High Yield Savings - 0.60% APY

Click Here to Get Deal

$0 minimum opening deposit. No minimum balance requirement. No fees to open or maintain account.

If you want a savings account with more flexibility, Synchrony's High-Yield Savings offers an ATM card. You can withdraw savings quickly (up to 6 per statement cycle) instead of having to wait a few days for electronic transfers.

Other benefits include:

• No minimum deposit
  
• No monthly service fee

Best Big Bank: HSBC Direct

Member FDIC
HSBC Direct Savings - 0.15% APY
Click Here to Get Deal
• Earn 0.15% APY on all balance tiers
• No monthly maintenance fee
• Minimum balance to open account is $1
• Member FDIC

HSBC Direct is the online division of HSBC, one of the largest global banks. Even though it's with a large traditional bank, this account is online only. You can't go to a branch to conduct business.

The online savings account offers:

• High APY
  
• No service fee
  
• Only $1 to open

Best Savings With No Fees: Discover

Member FDIC
Online Savings Account - Earn 0.50% APY
Click Here to Get Deal
• No fees
• No minimum opening deposit
• No minimum balance required

Discover is a full-service bank with checking, CDs, and credit cards.

Discover's online savings account has:

• No service fee
  
• No balance requirements
  
• $0 to open

For High Balances: Popular Direct

Plus Savings Account

• 0.60% APY
• $5,000 Minimum Opening Deposit
• $4 monthly service fee; waived with a daily minimum balance of $500
• Daily Compounding Interest
• FDIC Insured

Click Here to Get Deal

Popular Direct's Plus Savings Account offers one of the highest rates. But the minimum opening deposit is a whopping $5,000. You must also maintain a $500 balance in the account or face a monthly fee.

Marcus by Goldman Sachs

Marcus Online Savings - Earn 0.50% APY

Click Here to Get Deal

No minimum deposit

Marcus is the online savings account offered by the investment giant Goldman Sachs. It offers a very competitive rate with no minimum deposit and no services fees.

However, the app doesn't support mobile check deposits. And Marcus doesn't have checking or an ATM network.

The app also offers smart money management tools. You can link other financial accounts to see your spending habits, savings progress, and how much leftover money you have for the month.

Axos High Yield Savings

Member FDIC
High Yield Savings - 0.61% APY
Click Here to Get Deal
• 0.61% APY on all balance tiers
• No minimum balance requirements
• No fees to open or maintain account
• Free ATM card upon request
• FDIC Insured

Axos is a popular online bank with checking, savings, business accounts, loans, and investing services. It's another good choice if you want everything under one roof.

The High Yield Savings account offers a high rate with no service fees. The minimum to open is $250, but after that, there are no more balance requirements. You can also get a free ATM card upon request.

Non-Bank Savings Account: Betterment

Betterment Cash Reserve - Earn up to 0.40% APY
Click Here to Start Saving
• FDIC insurance covering up to $1,000,000 at program banks
• Access cash in 1-2 business days
• No minimum balance
• No fees on balance
• Unlimited withdrawals

Betterment, the popular robo-advisor, as expanded their services to include checking and savings. Their Cash Reserve account offers an amazing rate.

Advantages of using Betterment over bank savings accounts include:

• Unlimited withdrawals with no fees
  
• Faster transfers between your linked banking account within 1-2 business days
  
• FDIC insured up to $1,000,000

Anyone can sign up to be a Betterment customer and open this account without having to use their robo investing services.

Other Popular High-Yield Savings Accounts

These accounts also offer competitive rates:

Fitness Bank Savings Account
Fitness Bank is a lifestyle online bank that rewards you for keeping active. The app tracks your daily walking/running steps. The more steps you get in, the higher APY you earn.

There is a $100 opening deposit and a $10 monthly fee that is waived when you maintain a $100 minimum balance.

And yes, Fitness Bank is a legit FDIC insured bank. It's a division of Affinity Bank.

American Express Personal Savings
Their rates are competitive with other high-yield savings accounts. There are no monthly fees and no minimum deposit. However, you must fund your account within 60 days of application approval.

State Farm Money Market
State Farm Bank's money market account gives you free ATM card and checks. This is good for more flexibility, but there are some stipulations.

The minimum opening deposit is $1,000. And you must maintain a $500 daily balance or make 1 direct deposit/month to avoid a service fee.

The high APY is offered as an introductory rate for the first year. It also applies if you open a checking account and meet the balance/deposit requirements.

Investors eAccess Money Market
This is a money market account, but with no ATM access or check writing. However, the interest rate is one of the highest offered on the market.

There is no monthly service fee, opening deposit, or minimum balance requirement.

What to Look For in a High Yield Savings Account

• Required Opening Deposit
  If you are just starting to build your savings, look for an account with no minimum deposit.

• Balance Requirements
  Some accounts have minimum daily balance or monthly deposit requirements. If you don't meet it, you get the advertised APY. However if you can, it could be worth it for a higher APY.

• Monthly Service Fee
  Most of the banks on our list have no monthly service fee. But a couple do require a minimum daily balance in order to avoid the service fee. This isn't necessarily a bad thing - if you can maintain the required balance, you may earn a higher APY.

• APY Rate
  Look for the highest APY rate on the account with requirements you can satisfy. Weigh the requirements against the APY.
  A slight difference in APY could make a big difference in how much you save.

  Imagine two banks with APYs of 2.20% and 2.40%. If you only have $1,000 to save, that's a difference of just cents over a year. But if you have $50,000, that's a difference of $100 every year.
  

  A high yield savings account is a great spot to keep your emergency fund and to save for short-term goals. The hope is never to need to touch an emergency fund, so at the very least it should earn a competitive yield and generate some interest income.
  Cynthia Flannigan, CFP®, MainStreet Financial Planning
  

• ATM Access
  Do you want to withdraw your savings through ATMs? If so, your choices are more limited. Not a lot of savings accounts offer ATM access, but there are a few options. You can also choose a money market account.

• Other Banking Services
  Looking for a checking and savings under one bank? Some online banks only offer savings accounts so you'll need to choose a full-service bank.

Advantages of a High-Yield Savings Account

A high-yield savings account gives you a safe place to grow your money. Some of the benefits are:

• Security
  Your deposits are FDIC secured, which means that you are covered (up to $250,000) if the bank defaults.

• Guaranteed returns
  Unlike investing in stocks or bonds, your savings have reliable returns and no risk. However, the APY can change according to the market - you'll always earn the current advertised rate.
  If you want fixed returns, look into Certificate of Deposits instead. You'll be required to tie up your money for a certain time, but you will get a guaranteed fixed rate for the entire term.
  

• Flexibility
  You can transfer money in and out to access your savings when you need it. Note that federal regulation limits withdrawals/transfers to 6 per statement cycle, without penalty.

What Experts Say

CreditDonkey assembled multiple industry experts to answer readers' most pressing questions:

• Why are people still using traditional banks?
  
• Are online banks safe?
  
• How do you stay calm during financial stress?

Here's what they said:

High-Yield Savings vs CDs

Unlike high-yield savings accounts, Certificates of Deposits (CDs) require that you tie up your money for a certain term. You cannot withdraw your funds before the term ends (or you'll face a penalty).

To reward you for tying up your funds, you will receive a guaranteed fixed rate that may be higher than a savings account (depending on the term). CDs tend to be better for those with long term savings goals (1-10 years).

See our list of the top CD rates.

Bottom Line

A high-yield savings account is one of the best vehicles for growing your money safely. With so many banks competing for your business, there's no reason to stick with a traditional bank's nearly non-existent rates.