Are you tired of your local bank’s near-zero percent rates and annoying fees? It doesn’t have to be that way. The best high-yield savings accounts earn as much as 1.70 percent and can turn your interest income from pennies into dollars.
A higher interest rate makes it easier to save for emergencies and large purchases like a house or car. You also have more incentive to earn passive income.
Now is a perfect time to find the best online bank savings rates. The sooner you start, the more income you can earn. The top high-yield savings accounts typically have higher interest rates than most local banks.
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List of Best High-Yield Savings Accounts in 2022
It only takes a few minutes to compare high-yield savings accounts for the best rates and initial deposit minimums. The best internet savings accounts won’t charge any account fees.
Each has Federal Deposit Insurance Corporation (FDIC) insurance for the first $250,000 of your account balance.
1. CIT Bank
CIT Bank has two options for savings accounts. Their Premier High Yield Savings currently yields .25 percent on the entire account balance.
You can earn a higher interest rate with a Savings Builder account. Making a minimum $100 monthly deposit lets you earn .45 percent on your account balance.
However, your entire account balance only earns .29 percent APY if you skip a recurring deposit.
A daily account balance above $25,000 also lets you earn the interest rate boost. You may avoid the Savings Builder account if you don’t make recurring $100+ deposits.
Both accounts require a $100 minimum initial deposit and don’t have monthly account fees.
Read our CIT Bank review to learn more about CIT’s other banking services.
2. Chime
Chime is a mobile-only financial app that offers online savings accounts and a free checking account. You will first open a Chime Spending Account before requesting a Chime Savings Account.
Both accounts have no monthly fees and don’t require a minimum balance.
You can also receive your direct deposit paycheck up to two days early. The SpotMe feature can prevent overdraft fees on qualifying debit card purchases.
The spending account can round up your debit card purchases to the next dollar. Chime transfers these round-ups from your spending account into your savings account.
The current interest rate on a savings account is 0.50 percent, eight times the national average.
Read our Chime review to learn more about free ATM access and overdraft protection.
3. Betterment Cash Reserve
The Betterment Cash Reserve pays up to .10 percent on all deposits. This rate is on the low end of the best high-yield savings rates.
Like Chime, the pandemic has impacted Betterment’s rates.
But you get up to $1 million in FDIC insurance. Joint accounts are insured up to $2 million. Most banks don’t offer such extensive coverage.
There are no account fees or account minimums. You can make unlimited account transfers, which is unique as most banks have a six-transaction monthly cap per federal law.
A Cash Reserve account can be a good option if you invest with Betterment. This fully automated robo-advisor invests in stock and bond index funds.
The robo-advisor also recently added Betterment Checking as a feature. Like the Cash Reserve account, it has no account minimums or fees. They also reimburse any ATM fees from ATMs that accept Visa.
Read our Betterment review to learn more about the platform has to offer.
4. Axos Bank
An Axos Bank High Yield Savings yields 0.61 percent on all deposits, which is about 6 times the national average. You can receive a free debit card upon request.
Axos Bank offers a “switch kit” to help transfer your current bank account.
There are no monthly account fees or minimum balance requirements. However, the $250 initial deposit is higher than other high-yield interest savings accounts.
5. Discover
You will find one of the best rates at Discover Bank. Their High-Yield Savings Account yields 1.01 percent on the entire balance.
There isn’t a minimum initial deposit or ongoing balance requirement. You won’t pay monthly service fees either.
Discover offers free monthly updates to track your FICO credit score.
6. Synchrony Bank
Synchrony Bank is known for having some of the best high-interest rate savings accounts. Your entire Synchrony High Yield Savings account balance earns 1.50 percent.
The lack of account fees and no minimum initial deposit makes this a good option to grow an emergency fund.
You can request an optional debit card to make up to six monthly withdrawals. Most online savings accounts don’t offer debit cards, but money market accounts do.
Synchrony provides up to $5 in non-network ATM reimbursements. In-network ATM withdrawals are free.
7. UFB Direct
Can you maintain a minimum $10,000 account balance? If so, the UFB High Yield Savings Account is one of the top online savings accounts, as you can earn up to 1.70 percent.
The only catch is that only balances above $10,000 earn interest. The first $9,999 earns no interest, but you won’t pay account fees with a small balance.
8. LendingClub Bank
LendingClub Bank (formerly Radius Bank) is well-known for its rewards checking account. This bank also has a high-yield online savings account.
However, this may not be the best account option as it’s exclusive to LendingClub Notes investors. Also, your entire balance doesn’t earn interest. The LendingClub Bank Founder Savings account has three interest rate tiers:
- Balances up to $20,000.00: 0.75 percent
- Balance from $20,000.01 to $50,000.00: 0.50 percent
- All balances exceeding $50,000: 0.25 percent.
There’s an auto-save feature allowing investors to auto-transfer cash from their Notes investment account to their Founder savings account each week.
9. PenFed Credit Union
PenFed Credit Union is one of the few credit unions to offer online savings accounts with high-interest rates. The Premium Online Savings Account is fee-free, and all balances earn 1.40 percent.
The minimum account deposit is $5. However, this account is online-only and doesn’t provide local branch access.
Your account has $250,000 of National Credit Union Association (NCUA) insurance instead of FDIC insurance, which is for banks.
Credit unions have stricter membership requirements than online banks. You will have to supply your personal information during the PenFed application process. However, no military service is required to become a member.
10. HSBC Direct
HSBC Direct is the online-only savings account for HSBC. This option can be a wise choice if you have an HSBC checking account to keep your money under one roof.
The Direct Savings account doesn’t have local branch access. Your entire balance earns 1.70 percent.
There are no account service fees, and a $1 initial deposit opens your account.
11. Nationwide My Savings
Nationwide My Savings is a top contender for the best high-yield savings accounts. Your entire account balance earns 1.70 percent, one of the best high-yield interest rates.
You will need to make a $100 initial deposit but do not need to maintain a minimum balance.
Another unique trait is that Axos Bank provides Nationwide’s banking services. Like Axos’ high-yield account, there are no account fees, but Nationwide earns a higher interest rate.
You do not need to have a Nationwide insurance policy. However, you may see offers for Nationwide’s various insurance products.
High-Yield Online Savings Accounts FAQs
Most banks with high-yield savings accounts are transparent about potential fees. However, internet bank accounts work differently than a standard account.
How does an online savings account work?
Many online savings accounts offer above-average interest rates, low account minimums, and no monthly fees.
However, you might only be able to access them from a bank website or mobile app. Banks like Capital One with online savings accounts don’t offer local branch access.
Many of the best high-yield savings accounts are from online-only banks. You will need to link your savings account to a checking account or enroll in direct deposit to fund your account.
You can also make mobile check deposits.
In exchange for a higher interest rate, federal law only lets you make up to six withdrawals per month. These savings accounts can’t double as a checking account for your daily spending.
What makes a savings account high-yield?
High-yield accounts offer interest rates that are notably higher than standard bank accounts.
Most standard savings accounts have an annual yield between 0.01 and 0.10 percent. The best online savings accounts have interest rates above 1.00 percent and as high as 1.70 percent.
Here is how much annual interest you can earn on $1,000 deposit:
- 1.50 percent: $15
- 1.00 percent: $10
- 0.01 percent: $0.10
High-yield interest savings accounts are an effortless way to boost returns when bank interest rates are at historic lows.
Is my money safe in an online bank?
No online or local bank is risk-free. However, the online banks we recommend are FDIC-insured up to $250,000.
This coverage is the same protection that local banks offer. If your online bank fails, you can recoup the first $250,000 of your account balance.
Credit unions have similar $250,000 coverage but through the NCUA instead.
What is the limit on withdrawing my funds?
Federal law allows up to six withdrawals each month for online-only savings accounts. Most banks charge a small fee for each excess transaction.
This withdrawal restriction doesn’t apply to online checking accounts or standard savings accounts. The good news is that you can earn a higher interest rate and avoid bank fees.
What is a promotional APY?
The standard interest rate you earn on savings accounts is an annual percentage yield (APY). Most local bank savings accounts have an ongoing APY between 0.01 and 0.10 percent.
Many banks with high yield savings accounts have rates between 1.00 and 1.70 percent.
Banks may offer a limited-time promotional APY for new accounts. You might earn a 5.00 percent promotional APY for the first 12 months.
Your deposits earn the ongoing APY after the promotion period ends.
These promotions are an excellent way to grow your savings quickly. Read the promotion terms and conditions to make sure you qualify.
How does a savings account compare to a money market account or CD?
There are two common traits between savings accounts, money market accounts, and CDs:
- FDIC-insured up to $250,000 (some banks offer more coverage)
- All accounts can earn interest
Savings accounts and money market accounts are the most alike. You can make penalty-free monthly withdrawals. Banks may offer higher interest rates on savings accounts.
Money market accounts are more likely to offer an ATM card and paper checks. But some banks don’t offer an ATM card from savings accounts.
Bank CDs can earn the most interest of all three account types. However, you may not be able to withdraw your money until the CD term ends unless you pay an early redemption fee.
A 12-month CD, for instance, means you can’t touch that cash for one year.
Can I lose money?
High-yield savings accounts are a low-risk way to earn passive income on money you don’t invest in the stock market.
Most accounts are fee-free, so your monthly interest income isn’t reduced by fees.
Each savings account has FDIC insurance up to $250,000, but the coverage amount can be higher. If the bank fails, you can get the insured amount back.
You should open several accounts if you have more than $250,000 in cash savings.
One “hidden loss” for high-yield savings accounts is inflation. Even the best online bank saving rates have an APY that doesn’t outpace the actual rate of inflation.
The official US inflation rate is between two and three percent.
Summary
Finding the best interest rate and avoiding fees is one of the best ways to build wealth. A high-yield interest savings account is a fantastic place to park your emergency fund and save for future expenses.
Do you already have an online bank account? Can you earn more with one of these high-yield savings accounts? How often do you put money into your savings account?
*Chime is a financial technology company, not a bank. Banking services provided by, and debit card issued by, The Bancorp Bank or Stride Bank, N.A.; Members FDIC.
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