Interest rates have been at record lows throughout the past two years as a result of the pandemic. While this has been great news for borrowers, it hasn’t been so great for those hoping to earn a bit of interest on their savings.
But the savings landscape in 2023 looks very different. The Federal Reserve is increasing interest rates in response to the sky-high inflation, meaning savings account interest rates are going up too. Many account holders have already gotten emails from their banks about rising interest rates on their savings accounts.
If you’re in the market for a high-yield savings account, these rate increases mean that now is the perfect time to shop around for one. In this article, we’ll share the best high-yield savings accounts in 2023 to help you earn a bit of extra money on your savings.
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The Best High-Yield Savings Accounts in 2023
|Marcus by Goldman Sachs||0.85%||$0|
Bask Bank: 1.50%
Bask Bank offers a high-yield savings account with an APY that’s many times the national average. The account comes with no minimum balance requirements and no monthly fees, meaning you can keep as much or as little in your account as you want at any given time.
Customers can also open a Mileage Savings Account, where they can earn American Airlines AAdvantage miles for each dollar they save.
TAB Bank: 1.26%
TAB Bank offers a high-yield savings account that boasts no minimum deposit or balance, no monthly fee, and no cap on the amount of interest you can earn.
High-yield savings is just one of the products available at TAB Bank, meaning you can have all of your bank accounts there, including checking accounts, money market accounts, certificates of deposit, and business accounts.
SoFi is known for many financial services, from lending to investing to banking. The company allows you to earn 1.25% on both your checking and savings accounts. There are no fees or minimum balance requirements.
You can also get paid up to two days early when you set up a direct deposit into the account. SoFi also offers an automatic savings feature where you can organize your money, set savings goals, and save with roundups.
Bread Savings: 1.15%
Bread — formerly known as Comenity Direct — offers a savings account with one of the highest interest rates on the market. There’s a $100 minimum deposit to open the account, but then you’ll have to pay monthly maintenance fees or fees to access your money.
Bread Savings also offers other ways to save, including certificates of deposit with rates ranging from 2% to 2.85%, depending on the term.
LendingClub may be known for its personal loans, but it’s now becoming popular for its high-yield savings account. You’ll need a $100 deposit to open the account, but then won’t be subject to further minimum balance requirements or monthly fees. You can also get an ATM card for your savings account, which allows you to access your money at a moment’s notice.
LendingClub also offers a variety of other personal banking products, including checking accounts, mortgages, and business accounts, so it can be your one-stop shop for banking.
Citibank is one of the few brick-and-mortar banks that offers competitive high-yield savings accounts, with a current rate that’s 16 times the national average. There’s no minimum required to open your account. Citibank helps you set and reach your savings goals with goal setting, recurring deposits, and internal budgeting tools.
Unfortunately, Citibank does require either a $10 fee, a qualifying direct deposit or bill pay each month or a combined average monthly balance of $1,500 in eligible linked accounts.
Ally has remained one of the most popular high-yield savings accounts, and for good reasons. Ally has a high-yield savings account with an APY that’s above the industry average. It also offers checking accounts, CDs, loans, and investment accounts.
One of Ally’s most popular features is its savings buckets, which allow you to categorize your savings for different purposes, such as your emergency fund, vacation fund, or down payment fund, all in the same account. Ally has a surprise savings feature, where it automatically transfers small amounts from your checking to your savings accounts based on your normal spending.
Barclays offers a high-yield savings account with an APY that’s much higher than the national average. There’s no minimum deposit required to open the account. Barclays also doesn’t require a minimum monthly balance or charge monthly maintenance fees. The bank’s savings assistant can help you set a savings goal and then take steps to reach it.
Barclays also allows customers to save with certificates of deposit, which have APYs ranging from 1.50% to 2.75%, depending on the term. CDs have no monthly fees or minimum balances.
Marcus by Goldman Sachs: 0.85%
Marcus by Goldman Sachs is a popular online savings account with plenty of attractive features. There’s no minimum deposit required to open the account and there are no monthly fees. This account offers same-day transfers to and from other banks for amounts less than $100,000. Compare that with other banks, which often require several days for a successful transfer.
Marcus also offers plenty of other financial products, including certificates of deposit, investment accounts, loans, and credit cards.
Synchrony Bank: 0.85%
You may know Synchrony as the company that offers store credit cards, but it also offers other banking products, including its high-yield savings accounts, certificates of deposit, money market accounts, and retirement accounts. Synchrony’s high-yield savings account doesn’t require a minimum deposit or minimum monthly balance, nor does it require a monthly fee.
If you’re looking for other ways to save, consider Synchrony’s money market accounts and certificates of deposit. The money market account offers an APY of 0.55%, while the certificates of deposit have rates starting at 1.50% with no minimum balance.
What is a High-Yield Savings Account?
A high-yield savings account is a type of savings account that pays a higher annual percentage yield (APY) than your traditional savings account. Technically any bank can offer a high-yield savings account, but it’s usually online banks that offer these accounts.
How Much Can I Earn in a High-Yield Savings Account?
The amount you can earn in a high-yield savings account depends on the APY of your account and the amount of money you have in the account.
For example, if you have an account with 1.00% APY and a $10,000 balance, you could expect to earn about $100 per year. But remember that interest in these accounts compounds. So in the second year, rather than earning interest on $10,000, you would earn interest on $10,100.
Remember, the interest rate on high-yield savings accounts changes depending on the current market rates. As a result, you may earn more interest during some years than others. For example, because interest rates are rising, account holders can earn more on the same amount of savings in 2023 than they did in 2022.
How Often do High-Interest Savings Accounts Pay Interest?
Each savings account’s APY shows the amount you’ll earn annually in your account, but accounts actually pay interest more often than annually. In most cases, you’ll have interest income deposited into your account on a monthly basis. However, that interest could compound daily, monthly, quarterly, or annually. Most online savings accounts compound interest daily.
How to Choose a High-Yield Savings Account
With so many high-yield savings accounts to choose from, it’s easy to get overwhelmed trying to decide which is right for you. Here are a few things to consider when choosing a high-yield savings account:
- APY: An account’s APY is one of the primary things to consider when choosing an account. The APY is the annual return on the account. The higher the APY, the better.
- Minimum deposit: Some banks require a minimum deposit when you open an account. These minimum deposits range from $0 to $100.
- Minimum balance: Similarly, some banks require that you maintain a minimum balance in your account to keep your account open and avoid fees.
- Withdrawal options: Because most of the accounts on our list exist only online, you want to be sure you can easily withdraw your funds. Consider how simple a bank makes it to transfer funds to another bank.
- Fees: These days, most online banks don’t charge fees. However, you may run into one that charges a monthly maintenance fee, especially if your balance dips below a certain amount. Try to avoid banks that charge these fees.
Is My Money Safe in a High-Yield Savings Account?
You don’t have to worry about losing money in a high-yield savings account. The money in these accounts is protected by the Federal Deposit Insurance Corporation. The FDIC insures up to $250,000 per account holder per account type. For most people, that’s more than enough to protect their entire savings. If your bank fails, FDIC insurance will make you whole again.
Note: Remember that if you have a checking and savings account with the same bank, the $250,000 insurance limit applies to both accounts combined.
How to Open a High-Yield Savings Account
Whether you’re building your emergency fund or saving for the down payment on a home, having a dedicated place to store your savings can help you not only keep your money safe and avoid spending it but can also earn a bit of extra money on your savings. Here’s how to open a high-yield savings account and start building your savings:
- Shop around. We’ve done a lot of leg work for you by providing a list of the best high-yield savings accounts above. Be sure to consider the type of financial institution you want (bank vs. credit union), the APY each financial institution offers, and which is the best fit for your finances and savings goal.
- Sign up online. The high-yield savings accounts on our list are online accounts, meaning it’s also easy to sign up online. When you complete the application form, you’ll generally have to provide your name, contact information, and Social Security number. You may also need to share a photo of your driver’s license so the bank can verify your identity. In most cases, you’ll be able to open your account right away. In other cases, the bank may need time to look over your information and will send you an email later confirming your account.
- Fund your account. Once your account has been approved and is officially open, it’s time to fund it. Some banks require that you deposit a certain amount into your account to get started, while some allow you to open the account with no minimum balance at all. You can generally fund your account by transferring money from your checking account. And if you’re working toward a particular savings goal, you can even set up an automatic recurring transfer.