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Everyday Money

6 Best High-Yield Savings Accounts 

By James F. Trumm MONEY RESEARCH COLLECTIVE

What are your long-term savings goals—are you working toward being debt-free or saving up for a comfortable retirement? Whatever your reason for saving, the best way is to maximize your gains with the highest interest rates. You can get more out of your savings by investing in a high-yield savings account, which can offer rates twenty-five times higher than traditional accounts.

You have many choices when looking for a personal savings account. To prioritize the features most important to you, consider these questions:

  • Are your savings goals short-term or long-term? Long-term savers will be better off with a high-yield savings account.
  • Do you want ATM access, or would ATMs tempt you to withdraw funds?
  • Are you comfortable with online banking, or do you prefer a physical bank?

Determine your answers before deciding on the best savings account for you. You might not choose the account with the highest annual percentage yield (APY) if other factors, like having access to a physical branch, are more important to you. To help you select the bank that’s most likely to meet your particular needs, we’ve compiled a list of the six hallmark features that savers are most likely to look for and chosen the best high-yield savings account in each category.

Our Top Picks for the Best High-Yield Savings Accounts

We compared options for high interest savings accounts to identify the best ones in each category. We’re comparing only high-yield savings accounts, so consider other types of savings accounts or money market accounts if you’re interested in more traditional account structures.

Our top picks for the best high-yield savings accounts are Varo, Discover, PenFed, Ally Bank, Betterment Cash Reserve, and CIT Savings Builder. Each account offers unique perks and benefits that could be right for you. Let’s take a closer look! Be aware, though, that while the interest rates mentioned below were accurate at the time of writing, they are subject to change at any time, so be sure to check with whatever bank or financial institution you’re considering to see what its latest rates are.

We chose Discover’s high-yield savings account because not only does it have a high interest rate, it also compounds interest daily. This means you earn money faster with Discover than you do with banks that compound interest less frequently.

Plus, Discover doesn’t charge the service fees that many other banks do. For example, accounts don’t incur an insufficient funds fee if a purchase amount exceeds the amount of funds in your account. Overall, you shouldn’t expect to pay any fees, and Discover doesn’t require a minimum initial deposit or minimum balance to earn interest.

Another factor that puts Discover at the top of our list is its customer service. When you need support, you can connect with a live person instead of the automated help service that most banks employ. In terms of customer satisfaction, Discover ranks second in J. D. Power’s 2021 Direct Banking Satisfaction Study.

What set Ally apart as offering the best online banking high-yield savings account are its savings booster programs, which encourage the account holder to save more. While other institutions have programs like these, Ally provides the most ways to save.

Ally offers some of the best checking accounts as well. By opening both checking and savings accounts with the bank, customers can take advantage of the following savings tools:

  • Recurring transfers: Customers can specify to transfer funds from a checking account to a savings account on a recurring basis. This tool guarantees regular saving so you don’t need to remember to move money into your savings account.
  • Round up: Whenever a customer makes a purchase with their checking account, Ally rounds up to the nearest dollar amount. Then those funds transfer into your savings account.
  • Surprise savings: When a customer links their checking account to their savings account, Ally can analyze spending habits to identify money that isn’t needed for monthly expenses. These funds are automatically transferred to the savings account, where they earn more interest.

As an online bank, Ally offers other conveniences as well. For instance, it’s easy to set up and use an account. In addition, you get a higher interest rate because Ally doesn’t have to maintain physical locations.

Betterment Cash Reserve is the best cash management account because it offers the highest level of Federal Deposit Insurance Corporation (FDIC) insurance available. Funds in a Cash Reserve account are deposited into up to four banks at a time, so you get four times the usual FDIC coverage.

Plus, unlike its competitors, Betterment allows customers to bucket savings into separate categories, like a kitchen renovation or a weekend getaway, so you always know what you’re saving for. It’s easy to set up auto deposits to save for each category on the list.

As an investment service rather than a bank, Betterment offers unique perks. Because Betterment Cash Reserve is not considered a savings account by the Federal Reserve, you can make more than six withdrawals per month without penalty. And because it isn’t tied to one specific bank, it can negotiate savings rates in the marketplace and pass the savings on to you.

Pentagon Federal Credit Union’s Premium Online Savings account is the best credit union option for a high-yield savings account because of its high interest rate. As a not-for-profit credit union, PenFed can offer higher yields and is committed to its members.

Unlike other credit unions, PenFed doesn’t charge a monthly fee for maintenance or any transfer fees. To open an account, simply fill out the membership application on the PenFed website and deposit a minimum of five dollars.

The Varo savings account offers the highest APY rate on the list with its tiered interest rate program. An account holder earns a high APY from the start, but with Varo you have the opportunity to earn up to the highest advertised rate. Simply meet specific requirements, such as depositing $1,000 each qualifying period, and you can watch your interest grow.

Varo Bank is one of the neobanks striving to provide modern banking perks as an alternative to the large traditional banks around the world. For instance, Varo offers several savings tools, such as Save Your Pay and Save Your Change. With these enabled, you can automatically transfer part of your paycheck to your savings account or round up your spending to save the difference.

Other High-Yield Savings Accounts We Considered

In addition to the six best high-yield savings accounts of 2022 covered above, we also considered the following high-yield savings accounts. These are all good account options for saving more money than a traditional savings account. However, they weren’t on our best-of list because of factors like a lower interest rate or restrictions on access to your money if you need it sooner than expected.

When you’re choosing the bank account that’s right for you, identify your most important features and consider these high-yield savings accounts as well:

How We Chose the Best High-Yield Savings Accounts

To create our list, we compared accounts based on several categories that are important to customers. Let’s take a closer look at these factors, which all contribute to improving your savings strategy.

Annual percentage yield rates

For many, the most important factor in choosing a high-yield savings account is the APY rate. This list prioritizes the savings accounts with the best APY rates. The average high-yield APY is between 0.40% and 0.50%.

Ease of use and accessibility

The high-yield savings accounts on our list needed to be easy to use and accessible. We searched for deposit accounts that offer features like mobile apps and online platforms; options to withdraw or direct deposit online, by mailed checks, linking to other accounts and wire transfers; and easy access to ATMs.

Another crucial point is transparency. The best savings accounts will provide clear and accessible terms and conditions.

Maintenance fees or account balance requirements

If you open an account with an institution that charges lots of fees, you reduce the amount of money that you can earn. We chose companies with no maintenance or balance fees, or minimal balance fees. We also picked accounts with low or no minimum balance requirements so that you can start saving right away, no matter how much money you start out with!

Customer service

The best rates and the lowest fees are worth it only if you can get help when you need it. Excellent customer service is a must for any financial institution, which is why we listed companies that offer support through phone, email and chat. A few even offer 24-7 assistance.

Strong financial standing

When you invest in a savings account, you entrust it with not just your hard-earned money but your future security as well. That’s why the institutions on this list have strong ratings from agencies like S&P Global, Fitch Group and Moody’s.

We were also sure to pick only institutions insured by the Federal Deposit Insurance Corporation (FDIC) or National Credit Union Administration (NCUA). To be insured by these government entities, institutions must apply and meet certain standards. Both organizations will protect up to $250,000 for each customer.

Summary of the Best High-Yield Savings Accounts of 2022

James F. Trumm

James F. Trumm has written and edited numerous articles about consumer finance, travel, literature, and other topics. He’s currently editing a book for the University of Toledo Press and hosting Wanderlust, a radio show about how travel changes people.