Noteworthy High-Yield Savings Offers

Traditional savings accounts are not the ideal environment to help your money grow over time, but the new trendy online versions are changing that. With the increasing number of online savings accounts offering what appear to be amazing interest rates (with caveats like minimum balances and transactions, in some cases), you can grow that nest egg you’re sitting on. But how do you pick the right one?

UFB Direct Best Savings Account

  • Interest rate: Up to 4.21% APY
  • Compounding period: Daily
  • Fees: No monthly fees or minimum balance requirements
  • ATM access: Yes
  • Can you bank in person? Not really. While there is one branch in San Diego, California, UFB Direct is primarily an online bank.
  • Can you bank online? Yes

Why we like it: UFB Direct’s Best Savings Account offers one of the most competitive interest rates, even among high-yield savings accounts. The APY for this account is up to 4.21%. Plus, it offers all of the resources expected from online banks, included mobile tools, as well as some you wouldn’t expect, like a free ATM card.

About UFB Direct: A division of Axos Bank, UFB Direct is known for having some of the strongest rates in the business. Established in 2000, this FDIC-insured bank is headquartered in San Diego, California.

CIT Bank Savings Connect Account

Interest rate: 4.05% APY
Compounding period: Daily
Fees: No monthly services fees or minimum balance requirements
ATM access: Reimburse up to $30 in ATM fees per month
Can you bank in person? No, CIT does not have brick-and-mortar banks
Can you bank online? Yes

Why we like it: CIT provides some of the best APYs in the business, and currently, it’s Savings Connect account features its best offer. With virtually no fees and an easy to navigate application process, it’s easy to recommend this FDIC-insured savings account.

While you might also want to consider a CIT Savings Builder Account or CIT Money Market Account, if high APY is your main concern, Savings Connect is going to be your best bet.

About CIT Bank:

CIT is an online bank that specializes in online savings accounts, CDs and money market accounts. While it can be easily mistaken, CIT is not related to Citibank. CIT stands for Commercial Investment Trust, and was founded in 1908.

Citizens Access Online Savings Account

  • Interest rate: 3.75% APY
  • Compounding period: Daily
  • Fees: No monthly service fees; minimum opening balance requirement of $0.01
  • ATM access: None
  • Can you bank in person? No
  • Can you bank online? Yes, and through the mobile app. You’ll need to connect a checking account, use the app to deposit, or you will need to mail in a check to open the account. To get your money out, move it back to your external banking account via transfer.

Why we like it: If you plan to park your money for some time, Citizens Access is a good bet. On the other hand, if you’re looking for an associated checking account from the same institution, it may not be the right choice.

About Citizens Bank:

Citizens Bank is the 13th largest bank in the U.S., and Citizens Access is its online arm, which currently only offers two options for online banking: a savings account and a CD.

Citizens Access is FDIC insured and has been in business (online) since 2018. Citizens Bank has been around since 1828.

SoFi Checking and Savings Account

  • Interest rate: 2.50% - 3.75% APY
  • Compounding period: Monthly
  • Fees: None
  • ATM access: Access to 55,000 ATMs worldwide through the Allpoint Network
  • Can you bank in person? No, SoFi is an online-only bank
  • Can you bank online? Yes

Why we like it: So long as you’re not the type of person who needs to bank in person or who handles lots of cash transactions, you’ll likely find a lot to love about the SoFi Checking and Savings Account. Its APY is extremely competitive, and the company is known to regularly offer sign-up bonuses to new customers.

About SoFi: Although the company has been around for years, SoFi officially received approval for a national bank charter in 2022.

While the finance company already offered customers many services associated with traditional online banks, this move allowed SoFi to begin offering a straightforward checking and savings account with a remarkably healthy APY.

Synchrony High-Yield Savings Account

  • Interest rate: 3.75% APY
  • Compounding period: Daily
  • Fees: None
  • ATM access: Yes. Synchrony says that it doesn’t charge fees for ATM usage and will refund up to $5 per ATM fee that other banks charge. It uses the Accel Network of ATMs.
  • Can you bank in person? No, Synchrony is an online-only bank
  • Can you bank online? Yes

Why we like it: Synchrony makes it easy to access your funds on the go. For starters, accountholders receive an ATM card for this savings account, but remember, like all savings accounts, you can only have six transactions within a statement cycle. You can access your money via ATM, online or via phone. Synchrony also offers customers what they call “Perks” for keeping money in the account.

About Synchrony:

Synchrony is an online bank that offers online savings accounts, CDs, money markets and IRAs. Synchrony Financial also offers retail credit cards for companies like Walmart, JCPenney and Lowe’s. It used to be a part of GE and was spun off as a separate entity.

Synchrony is FDIC insured and has been in business for the last 90 years (under GE). All rates are subject to change at any time.

Key Features to Look for in Online Savings Accounts

When looking for a new high-yield savings account, make sure it has the following key characteristics:

  • A strong interest rate
  • Easy access and liquidity
  • Fee-free banking (or minimal fees)
  • Loss protection (FDIC insured)

Like any financial decision, you need to be sure that the account you choose is right for you.

High-Interest Savings Accounts vs. Money Market Accounts: What’s the Difference?

High-yield savings accounts and money market accounts are two types of savings products offered by financial institutions. In both cases, you’ll likely earn a higher interest rate than you would by keeping your money in a traditional savings account.  

Money market accounts typically offer some checking account features, such as a debit card and check-writing privileges. While not totally unheard of, high-yield savings accounts don’t usually include either of these features.

High Yield Savings FAQs

While savings accounts have existed for quite some time, some people aren’t as familiar with online high-yield savings accounts. Here are some of the more common queries related to high-yield savings accounts:

  • A high-yield savings account is a type of savings account that offers a much higher interest rate than a traditional savings account, resulting in a higher APY. Typically, high-yield savings accounts are available through online banks, instead of financial institutions with brick-and-mortar locations. With less overhead than conventional banks, online banks usually offer extra perks to customers, like lower fees and higher interest rates on checking and savings accounts. The national deposit rate is usually below 0.20%, but you can find high-yield savings accounts that offer upward of 1.00% APY and higher.

    The federal government repealed Regulation D in 2020, which limited the number of withdrawals and select bank transactions on savings accounts to six per monthly statement cycle. However, some banks have stuck with the six-transaction per statement limit as a matter of course. Usually, those banks charge a penalty fee if you exceed the monthly transaction limit.

  • Arguably the most important factor when considering high-yield savings accounts is the annual percentage yield (APY). A higher APY will maximize your deposits so you can reach savings goals. Some banks offered tiered interest rates based on your account balance, with the best rates reserved for higher balances.

    However, even if you get the best available APY on your high-yield savings account, that’s not the only factor to consider. Beyond interest rates, you should also look at what types of fees (if any) the bank charges, minimum deposit requirements, minimum balance requirements and withdrawal options. Always check the full account details before applying for a new high-yield savings account.

  • Most commonly, savings accounts will have some sort of monthly maintenance or service fee. Many banks charge a maintenance fee that helps cover bank operating costs. Maintenance fees are more common with traditional banks, but some online banks charge them too. However, some banks offer a way (or ways) to waive monthly fees, usually by meeting account deposit or balance requirements.

  • Until 2020, high-yield savings accounts were subject to Federal Reserve Board Regulation D, which limited savings accounts to six withdrawals or transfers per statement period. Transactions that fell under this regulation included:

    – Electronic funds transfers (EFTs)
    – Automated clearing house (ACH) transfers
    – Wire transfers
    – Third-party checks
    – Debit card transactions
    – Overdraft transfers

    While Regulation D was suspended at the start of the COVID-19 pandemic, some banks have continued to elect to enforce six-transaction limits on savings accounts, so make sure to read your terms and conditions clearly when looking at a new account. Some banks charge a fee or pursue other actions (up to account closure) if you repeatedly go over transactions limit during the statement period.

  • Every bank and financial institution is different, which means “high-yield” is a relative term that can encompass a wide range of APYs. However, the best high-yield savings accounts typically offer an APY that’s at least 12 times higher than national average.

    The other main factor to consider when calculating potential earnings is your typical account balance.

    Even if you open an account that offers 3.00% APY compounded daily, if you just place $1,000 into the account and make no further deposits, you’ll only earn about $30 in the first year the account is open. In contrast to this, someone who deposits $10,000 into that account will earn $300 in interest during the same 12-month period.

  • Most banks allow you to open a high-yield savings account online. Usually, you’ll need to provide personal information, like your full name, address, phone number and Social Security number or driver’s license number, to verify your identity. You will also need bank account information for whatever source you’re using to fund your new account.

  • Yes. Like most deposit accounts, high-yield savings accounts feature variable interest rates that change over time. Rate changes for high-yield savings accounts typically mirror the federal funds rate set by the Federal Reserve. As the federal funds rate rises and falls, so do rates on high-yield savings accounts and other deposit accounts.

  • Online banks can often afford to offer higher interest rates because they don’t incur the same overhead costs as traditional banks. With no bank branches and typically fewer employees, online banks can pass savings along to their customers with fewer fees and higher rates on deposit accounts.

    However, keep in mind that can also mean online banks offer fewer customer service options than some large banks. You can’t just walk into a location and get help; you’ll need to stick with your digital bank’s set customer service hours and handle things over phone or messenger.

  • Like traditional banks, reliable online savings accounts are FDIC insured up to $250,000 per depositor. Online savings accounts through credit unions will also be insured up to $250,000 per depositor, but are backed by the National Credit Union Administration (NCUA). You can verify that your online bank is safe through the FDIC BankFind tool.

  • Many online banks use the latest encryption technology, as well as other other security measures, to ensure your funds and personal information are protected at all times when you are banking.