Summary of Best High-Yield Online Savings Accounts of April 2020
Marcus by Goldman Sachs Online Savings Account
With $0 minimum balance
American Express National Bank Personal Savings
With $0 minimum balance
Citizens Access Online Savings Account
With $5000 minimum balance
Barclays Online Savings Account
With $0 minimum balance
Capital One 360 Performance Savings™
With $0 minimum balance
UFB Direct High Yield Savings Account
With $10000 minimum balance
Discover Bank Online Savings
With $0 minimum balance
Salem Five Direct eOne Savings
With $0.01 minimum balance
CIT Bank Savings Builder
With $100 minimum balance
FNBO Direct Online Savings Account
With $1 minimum balance
High-yield savings account definition
A high-yield savings account is a type of federally-insured savings account that earns rates much higher than the national average. Typical high-yield accounts can earn around 1.50% APY. To compare, the national savings average is 0.07% APY. If your money is in an account that earns a high interest rate, your balance will grow faster without any additional effort on your part. After one year, a balance of $10,000 would earn about $10 in an account with a 0.10% APY. That same balance would earn about $150 in an account with a 1.50% APY.
How to choose the best high-interest savings account
Look for accounts that have both high APYs and low service charges. You want to make sure you don’t have to pay a fee to the bank each month. Some institutions don’t charge monthly fees, while others do but will waive them if you meet a balance minimum.
Be willing to look beyond the larger, well-known banks. Many smaller institutions — including online banks — have the highest APY savings accounts along with low deposit requirements.
The highest APY savings accounts are easy to access
With online banking, you can access your account securely day or night. Online banks offer the highest savings rates on the market while charging fewer fees than traditional banks. Online banks often offer good websites and mobile apps that typically let customers deposit checks and pay bills.
How to open an account with the best APY
Depending on the type of bank, you can open a high-rate account either online or in person. You’ll need to provide your Social Security number and contact information, along with at least one form of identification, such as a driver’s license or a passport. (For a joint account, everyone wanting access to the account must provide this information and ID.) The bank will often require you to deposit money into the new account right away. You can do that by depositing cash or checks, or through a wire transfer.
What to do if you can’t open a high-interest savings account
Occasionally, a bank may not approve an application to open an account. This is likely because of issues with a customer’s previous banking history.
Unpaid bank fees and bounced checks can result in a negative file on ChexSystems, a consumer reporting agency that financial institutions use to evaluate a prospective customer’s banking history.
There are options for customers who have a ChexSystems file, including opportunities to open alternative accounts. For more information, read our primer on what to do if you have a ChexSystems record.
High-yield savings account terminology
Here’s a look at some important savings terms to know.
Savings account: A deposit account from a bank or credit union that typically earns interest.
Money market account: A type of savings account that often offers higher interest rates in return for a steep minimum deposit. (Think $5,000 or more.)
Interest: Money a bank pays into an account over time.
Compound interest: Compound interest is the interest you earn on both your original money and on the interest you keep accumulating. In an account that pays compound interest, the return is added to the original principal at the end of every compounding period, typically daily or monthly. Each time interest is calculated and added to the account, the larger balance earns more interest.
Annual percentage yield: The APY, or annual percentage yield, is the amount of compound interest an account earns in a year. The calculation is based on the account's interest rate and the number of times interest is paid during the year. A savings account with the highest APY grows faster than an account with a lower yield.
» Read more about 10 essential banking terms you need to know
More top choices for the best savings interest rates
Here are even more great choices for high-yield savings. These banks may have a higher minimum balance to earn interest, or a slightly lower APY. But when you're shopping for the account that fits you best, they're worth checking out.
- Nationwide Bank, 1.70%, $100 minimum to open account (read full review).
- Vio Bank, 1.75% savings APY, $100 minimum to open account (read full review).
- HSBC, 1.70% savings APY, $1 minimum to open account (read full review).
- Alliant Credit Union, 1.60% savings APY, $5 minimum to open account (read full review).
- Synchrony, 1.50% savings APY, no minimum to open account (read full review).
- Popular Direct, 1.70% savings APY, $5,000 minimum to open account (read full review).
- Varo, 1.61% savings APY, no minimum to open account (read full review).
- CIBC U.S., 1.45% savings APY, $1,000 minimum to open account (read full review).
- PurePoint Financial, 1.50% APY, $10,000 minimum to open account (read full review).
- Bank5 Connect, 1.20% APY, $10 minimum to open account (read full review).
» Interested in getting money from banks? See NerdWallet's best bank account promotions and bonuses
Last updated on April 1, 2020
We took a close look at over 70 financial institutions, including the largest U.S. banks based on assets, internet search traffic and other factors; the nation’s largest credit unions, based on assets and membership; and other notable and/or emerging players in the industry. We rated them on criteria including annual percentage yields, minimum balances, fees, digital experience and more.
Financial institutions surveyed are: Alaska USA Federal Credit Union, Alliant Credit Union, Ally Bank, America First Credit Union, American Express National Bank, Associated Bank, Axos Bank, Bank5 Connect, Bank7, Bank of America, Bank of the West, Barclays, BB&T, BBVA, BMO Harris, Boeing Employees Credit Union, Capital One 360, Charles Schwab Bank, Chase, Chime, CIBC U.S., CIT Bank, Citibank, Citizens Access, Citizens Bank, Comerica Bank, Commerce Bank, Connexus Credit Union, Consumers Credit Union, Discover Bank, E*TRADE Bank, Fifth Third Bank, First National Bank, First Tech Federal Credit Union, FNBO Direct, GoBank, Golden 1 Credit Union, Goldman Sachs Bank USA, HSBC Bank, Huntington Bank, KeyBank, M&T Bank, Moven, Nationwide Bank, Navy Federal Credit Union, Pentagon Federal Credit Union, PNC, Popular Direct, PurePoint Financial, Radius Bank, Redneck Bank, Regions Bank, Salem Five Direct, Sallie Mae Bank, Santander Bank, SchoolsFirst Federal Credit Union, Security Service Federal Credit Union, Service Credit Union, Simple, State Employees' Credit Union of North Carolina, State Farm Bank, Suncoast Credit Union, SunTrust Bank, Synchrony Bank, TCF Bank, TD Bank, TIAA Bank, U.S. Bank, UFB Direct, Union Bank, USAA, Varo, Vio Bank, Wells Fargo, Woodforest National Bank and Zions Bank.
To recap our selections...
NerdWallet's Best High-Yield Online Savings Accounts of April 2020
- Marcus by Goldman Sachs Online Savings Account: 1.70% APY
- American Express National Bank Personal Savings: 1.70% APY
- Citizens Access Online Savings Account: 1.70% APY
- Barclays Online Savings Account: 1.60% APY
- Capital One 360 Performance Savings™: 1.50% APY
- UFB Direct High Yield Savings Account: 1.70% APY
- Discover Bank Online Savings: 1.50% APY
- Salem Five Direct eOne Savings: 1.00% APY
- CIT Bank Savings Builder: 1.75% APY
- FNBO Direct Online Savings Account: 1.00% APY
Frequently asked questions
Institutions typically don’t change savings rates on an hourly, daily or even weekly basis. In fact, it’s common to see some rates remain unchanged for several months.
It’s important to note, however, that rates are variable and theoretically can change at any time. In addition, many banks will change their rates based on what their competitors are doing. You will often see groups of banks increase or decrease their APYs at around the same time, especially if the Federal Reserve recently hiked or cut rates, as it did in March 2020.
To get the best yield for your money, check out the best rates on a regular basis — at least once a month.
In short, yes. Most online banks are federally insured by the Federal Deposit Insurance Corp., up to $250,000 per depositor. If the account is with a credit union, the account will likely be insured through the National Credit Union Administration, also for $250,000 per depositor. This means that if a bank or credit union were to fail and go out of business, you would not lose the money you have in the account, up to the insured amount.
Savings accounts are subject to a federal rule called Regulation D, which limits the number of convenience withdrawals to a maximum of six per month. Affected withdrawals include online withdrawals, overdraft protection transfers and transfers initiated by telephone. If you have more than six of these transactions each statement cycle, your bank may levy an excess withdrawal fee each time you go over the limit.
Withdrawing cash from an ATM or from a branch teller does not count toward this limit.
» Want to learn more about savings withdrawal limits? Read our primer on Regulation D.
Money market accounts are a type of savings account. They generally come with high APYs, high minimum deposit requirements and some check-writing privileges. NerdWallet’s guide on money market accounts can help you learn more about these products and help you decide if a money market account is a good place to stash your funds.
A high-interest savings account, on the other hand, typically does not come with checks, though it will still offer a strong APY.