The 5 Best High-Yield Savings Accounts of 2022

A high-yield savings account offers interest rates up to 25x times higher than a traditional savings account, making it an excellent place to keep your short-term savings for that new computer or long-term goals, including a down payment fund or a vacation account.

Read our list of the 6 best high-yield savings accounts for 2022, and learn the importance of APYs, minimum deposit, and withdrawal options.

Our Top Picks for the Best High-Yield Savings Accounts

• Discover - Best Overall
• Ally Bank - Best Online-Only Bank
• CIT Bank - Best Savings Plan
• PenFed - Best Credit Union
• Varo - Best for Combining Checking and Savings

Best High-Yield Savings Accounts Reviews

Each company’s annual percentage yield (APY) is accurate at the time of this publication, but they may vary according to the rates set by the Federal Reserve. None of our top picks have a monthly maintenance fee.

The Discover online high-yield savings account checks all of the boxes by offering high interest rates and no fees. That means $0 monthly maintenance fees, no minimum initial deposit requirements, and no minimum balance.

Interest is compounded daily and paid monthly, and customers can manage their accounts with their mobile phones and deposit checks with the Zelle cash app. You can also integrate your savings with other Discover bank accounts.

In terms of customer satisfaction, Discover ranks 2nd in JD Power’s 2021 Direct Banking Satisfaction Study.

Ally’s online high-yield savings account is ideal for customers comfortable baking entirely online who want a high APY (0.50%) and no monthly fees.

The account is easy to set up and has convenient tools to boost savings, including customizable savings goals (“buckets”), which help you save for goals inside your online savings account. Customers can check their balances and complete other tasks using Amazon’s Alexa.

Ally has free ATM access at multiple locations with the Allpoint ATM network, and retail bank customers can speak with a representative over the phone 24/7.

CIT Savings Builder is a good option for customers who want to stick to a monthly savings plan. The Savings Builder account pays 0.40% APY but, to qualify, you must maintain a minimum balance of $25,000 or commit to depositing $100 each month.

Customers must also keep track of CIT’s Evaluation Period and Evaluation Day Calendar to meet these requirements, but if they miss the cutoff date in one cycle, they can always qualify in the next one.

PenFed’s Premium high-yield online savings account features competitive APYs and no fees. Credit Unions usually have a membership requirement, and in this case, you need to make ($5 deposit) to become a credit union member.

Open the account online and use the PenFed app to transfer funds between accounts, although check deposits must be made by mail.

This account is entirely online, but if necessary, customers can also find in-person service at one of the many physical branches available nationwide.

Varo’s high-yield savings account stands out for its tiered APY program. Customers can benefit from the highest rate advertised (2.80%) by opening a Varo checking account and depositing at least $1,00 each month. Additionally, they must make a minimum of five monthly purchases with their ATM card.

Varo also offers a set of useful online saving tools. Save Your Pay automatically transfers funds by taking a percentage of your paycheck, while Save Your Change rounds up checking account transactions and transfers the difference to savings.

Other High-Yield Savings Accounts We Considered

My Savings From Nationwide by Axos

Marcus by Goldman Sachs

Vio Bank

Barclays Online Savings

Synchrony High Yield Savings

High-Yield Savings Accounts Guide

High-yield savings accounts are relatively easy to understand, but they share many characteristics with other bank products. Read on to find out what makes these account different from the rest.

What is a high-yield savings account?

High-yield savings accounts, also known as high-interest rate savings accounts, are bank accounts that earn you higher interest than a traditional savings account. When it comes to saving, a higher interest rate means a better return on your money.

For example, most traditional savings or checking accounts provide a 0.01% interest rate, while interest rates on high-yield savings accounts range from 0.4% to 0.9%.

How does a high-yield savings account work?

By offering a higher interest rate than traditional savings accounts, high-yield savings accounts help you grow your money in a shorter span of time. This type of account also limits the ways in which you can access your money, so you’re less likely to stray from your savings goals.

These limitations are not the same for every high-yield savings account and some banks do allow you to order checks or request a debit card to allow easier access to your funds.

Why open a high-yield savings account?

High-yield savings accounts are a great alternative to traditional savings accounts due to their higher interest rates. They’re particularly useful if you have short- to medium-term savings goals, such as saving for college, a new car, or a new house.

Of course, high-yield savings accounts can also serve as a replacement for a traditional savings account. Considering their higher interest rates, they’re a great tool for putting away any surplus cash that you might not want in your checking account.

What is the difference between a high-yield savings account and a money market account?

While high-yield savings accounts and money market accounts have comparable interest rates, they have a few key differences. The most notable of these differences is that money market accounts allow you to write checks or use a debit card to access funds, while high-yield savings accounts rarely allow for ATM cards or checks.

On the other hand, high-yield savings accounts generally have fewer to no fees, while money market accounts require a minimum initial deposit and a minimum account balance to avoid maintenance fees.

How to choose a high-yield savings account?

Given that the main selling point of a high-yield savings account is its higher interest rate, a high APY should be the main factor to consider when shopping around.

However, like with any other type of bank account, you also want to make sure that there are few, if any maintenance fees (to avoid cutting into your interest earnings).

FDIC or NCUA insurance is also a must, which protects your money if your bank or credit union should fail (bankruptcy or insolvency).

Annual Percentage Yield

The annual percent yield (APY) is the calculation of how much interest is earned over a year, taking into account the effects of compound interest.

Because compound interest takes effect multiple times in a year (typically daily or monthly), the amounts earned through APY are slightly higher than the advertised interest rate. For example, a simple or nominal interest rate of 1% on a $1,000 balance would earn you $10 every year.

If you add monthly compounding interest — meaning the 1% interest applies every month instead of at the end of the year — your yearly return would be $10.05, giving you an effective APY of 1.005%.

APY rate stability

The interest rate you will get will vary depending on the interest rate set by the Federal Reserve. Banks use this to calculate the annual percentage yield (APY) for savings and investment products. When choosing a high-yield savings account, you want to find one that offers an APY greater than the national average 0.05% that you would earn in a standard savings account. Online banks and credit unions typically provide far higher interest rates on savings accounts than brick-and-mortar banks since they pay less overhead than banks with a physical branch.

Few to no administrative fees

High-yield savings accounts can come with monthly maintenance fees or requirements to maintain a minimum balance. Some accounts require you to maintain a minimum balance that would earn you at least one cent each month based on the APY. With other banks, you might not have to pay a monthly maintenance fee, but there may be additional fees such as overdrafts and wire transfer fees that you might need to pay.

FDIC/NCUA Insurance

Money in an online bank or any type of bank is secure as long as the bank is FDIC insured, meaning that the Federal Deposit Insurance Corporation backs it. Most high-yield savings accounts are FDIC-insured up to $250,000.

How much does a high-yield savings account earn?

True to their name, high-yield savings accounts have higher interest rates than a traditional savings account. These rates are usually 10 to 20 times higher than the average rate for savings accounts.

As of March 21, 2022, the national rate for savings accounts is 0.06% according to the FDIC. For comparison, PenFed Credit Union’s high-yield savings account (which currently offers some of the highest rates) offers up to 0.55% APY, which is just over 9 times higher than the national rate.

Latest News About High-Yield Savings Accounts

Interest rates have been consistently low across the board for a few years now. To get a better idea of why this happened, we interviewed experts for their thoughts on when high-yield savings account rates will go up.

If you’re still on the fence about it, you can also read our article on why you should open a high-yield savings account to better help you understand the benefits of doing so.

High-Yield Savings Account Glossary

• Annual Percentage Yield (APY) - APY is the effective rate of return on your investment after factoring in the effects of compound interest.

• Interest - Simply put, interest is the amount of money that a bank pays its customers for the privilege of holding their money. It is usually expressed as a percentage of the amount that each individual customer has deposited.

• Compound interest - You can think of compound interest as “interest on your interest.”

• Money market account - Money market accounts are similar to high-yield savings accounts, but aimed at businesses. They are more likely to allow for debit cards and checks, particularly for individual employees who need to access business funds regularly.

• ACH transfer - An ACH transfer is an electronic transfer of funds from one bank to another. The ACH stands for “automated clearing house,” referring to the network that manages these transfers.

• Savings account - A type of bank account with higher interest rates than a checking account. They’re designed to help you put away extra funds for emergencies or short-term purchase goals.

• High-yield savings account - A type of savings account with a higher interest rate than a traditional savings account. They’re meant to help you build funds for short- or medium-term purchase goals, such as a new car, college or even a new home.

• Checking account - A type of bank account designed for everyday spending. They allow for checks and debit cards. The interest rates offered by these accounts are typically the lowest.

How We Chose the Best High-Yield Savings Accounts

Competitive annual percentage yield rates

• Companies must offer competitive rates and have a solid history of high APY rates even before the federal reserve rates cut.
• The annual percentage yield for most high-yield savings accounts at the moment is between 0.40% to 0.50%.

Ease of use and accessibility

• User-friendly mobile app and online platforms
• Transparency with crucial information and terms and conditions
• Accounts with mobile accessibility were rated higher than those without
• Options to withdraw or deposit their money by electronic transfers, wire transfers, mailed checks or linking to external checking accounts
• ATM withdrawal options are a plus. Most online banks require that you open a checking account with them to access your money from an ATM.

Maintenance fees or account balance requirements

It is not in your best interest to sign up with an institution that will charge a handful of fees. We prioritized companies with:

• No maintenance
• None or minimal balance fees
• None or low minimum balance requirements
• Free online transfers

Customer experience

We recognize that direct banking customers should be familiar with online and mobile platforms, but customer support must be readily available when needed. The best online savings account offered chat, phone, email support, and some even guaranteed 24/7 customer support.

Strong financial standing

Your financial institution of choice should have a strong financial rating from a reputable credit rating agency. S&P Global Ratings, Moody’s, and Fitch Group are known as The Big Three in the industry, and you can search their databases for information on the bank of your choice.

Our Top Picks also had to be insured by the Federal Deposit Insurance Corporation (FDIC) or the National Credit Union Administration (NCUA). The FDIC covers up to $250,000 per depositor, per ownership category, per FDIC-insured institution.

Summary of Money’s Best High-Yield Savings Accounts of 2022

• Discover - Best Overall
• Ally Bank - Best Online-Only Bank
• CIT Bank - Best Savings Plan
• PenFed - Best Credit Union
• Varo - Best for Combining Checking and Savings