Whether you’re building your emergency fund or you need a place to stash your money for short-term goals, you can’t go wrong with a high-yield savings account. High-yield savings accounts pay 20 to 25 times the national average of a standard savings account. Furthermore, they’re FDIC-insured, meaning they’re safe and your money is accessible whenever you need it.
The Federal Reserve’s recent rate cuts mean that financial institutions have lowered interest rates for high-yield savings accounts, some by nearly half! If you’re wondering whether to take advantage of these lower rates, we’ve put together a list of some of the best high-yield savings accounts to compare for 2021.
What Is a High-Yield Savings Account?
High-yield savings accounts are deposit accounts that can be found online or at brick-and-mortar financial institutions. They typically pay a higher interest rate than traditional savings accounts and offer better returns than traditional checking accounts.
Here are some standard benefits of high-yield savings accounts:
- No or low fees: You can find high-yield savings accounts with no monthly fees or lower fees for insufficient funds.
- Higher APYs: High-yield savings accounts normally have higher APYs compared to traditional savings accounts.
If you’re looking for high-yield savings accounts to compare, make sure you consider the annual percentage yield, how often rates change, the minimum deposit, the minimum balance, and withdrawal options.
5 High-Yield Savings Accounts to Compare
There are dozens of different options available when it comes to high-yield savings accounts, but each has different stipulations to consider. Here are five high-yield savings accounts to compare.
1. Discover Online Savings Account
APY: 0.45%
Minimum deposit: $0
Discover Online Savings Account offers a low rate with zero fees for insufficient funds, excess transactions, or monthly maintenance. There’s also no minimum deposit required to open an account, and interest is compounded daily and paid monthly. The APY is variable and can change before or after you open an account. Discover also has 24/7 customer service available both over the phone and via online chat.
2. Ally High-Yield Savings
APY: 0.50%
Minimum deposit: $0
Ally is an online bank that offers competitive rates, and it’s received numerous top awards for online banking. Ally High-Yield Savings has no monthly maintenance fees, and there’s no minimum deposit. Similar to most banks, there’s a limit on transfers in and out of the high-yield savings account to six times per statement cycle. If over the limit, there’s a $10 fee on each transfer. Although during the coronavirus pandemic, there’s no excess transaction fee. The APY is variable and subject to change, and it may remain the same for all balance tiers or change based upon the account’s end-of-day balance.
3. Capital One 360 Performance Savings
APY: 0.40%
Minimum deposit: $0
At five times the national rate, Capital One’s 360 Performance Savings account has a competitive but variable APY on any balance. There’s no opening deposit, minimum balance, or monthly charges. Interest is compounded and paid monthly. You can set a savings goal and schedule recurring transfers from a Capital One 360 checking account until the full amount is saved.
4. Marcus High-Yield Savings
APY: 0.50%
Minimum deposit: $0
The Marcus high-yield Online Savings Account by Goldman Sachs doesn’t require an opening deposit or minimum balance. There are also no monthly maintenance fees. You can link other bank accounts for income and outgoing transfers with same-day transfers of $100,000 or less to/from other banks. APY rates do change, and there are customer deposit limits. The maximum amount on deposit for all individual and joint deposit accounts combined may not exceed $3,000,000 per account owner, with a $1,000,000 per account maximum.
5. Varo Bank Savings Account
APY: 0.40% to 2.80%
Minimum deposit: $0
To qualify for a Varo Savings Account, you must also open a checking account. When you make five debit card purchases and receive $1,000 in direct deposits, you earn the highest APY each month on balances up to $10,000. Interest is compounded daily and paid monthly and has a tiered interest rate system. There’s no minimum deposit to open an account, and you can start earning interest from a deposit of $0.01. This is an online-only bank with no physical locations.
High-Yield Savings Accounts to Compare for 2021
Before opening an account, make sure you pick the one that fits your needs and your situation. When looking for high-yield savings accounts to compare, you want the best return with zero to minimum cost or fees.
Some of the banks we listed only offer online-only savings accounts so keep that in mind if you need to be able to deposit cash. Each financial institution has its own set of rules regarding high-yield savings accounts, so make sure you read the fine print.
