Best High-Yield Savings Accounts of July 2025
Written by Theresa Stevens
A high-yield savings account generally has a much higher annual percentage yield (APY) than a traditional savings account. The highest rates on our list hover around 4.60% APY, which is significantly higher than the national average for savings accounts, currently at 0.38% APY.
At DepositAccounts, we regularly add new high-yield savings accounts to our database, and we update rates daily to ensure we’re showing you the best offers. But because the interest rate isn’t the only factor to consider when shopping for a high-yield savings account, we also track features such as minimum deposit and balance requirements, fees, and rate trends.
DepositAccounts strives to produce high-quality content that meets your needs and exceeds your expectations. Content is fact-checked to ensure accuracy and objectivity. DepositAccounts gathers thousands of savings account rates from banks and credit unions across the country to identify the best daily rates. Read more about our methodology here.
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- What is a high-yield savings account?
- How do high-yield savings accounts work?
- Are high-yield savings accounts safe?
- Pros and cons of high-yield savings accounts
- How to open a high-yield savings account
- How to choose a high-yield online savings account
- Alternatives to high-yield savings accounts
- Methodology
- Frequently asked questions
What is a high-yield savings account?
A high-yield savings account, or HYSA, is a savings account that earns an above-average rate. Today, the best high-yield savings rates are above 4.00% APY.
HYSAs are typically found at online-only banks, but you can also get them at traditional banks and credit unions. Many HYSAs must be opened and managed online or through a mobile app.
Typically, online banks provide high-yield savings accounts because these institutions have lower overhead costs than traditional banks with physical branches. This allows online banks to pass on the savings to customers through higher interest rates. It also enables these banks to offer low minimum balance requirements and low or no fees.
How do high-yield savings accounts work?
High-yield savings accounts pay interest just like traditional savings accounts. Interest generally accrues and compounds daily or monthly. At the end of each month, the total accrued interest for the month is credited to your account, making it available for withdrawal.
With compound interest, you earn interest on both the principal and the interest you’ve already accumulated. This differs from simple interest, which calculates earnings solely based on the initial principal balance.
- HYSA: Acronym that stands for high-yield savings account
- Compound interest: Refers to the money you earn on both your principal balance and interest
- Annual percentage yield (APY): The total amount of money a savings account earns in a year, including compound interest
Are high-yield savings accounts safe?
Any savings account you open at a bank backed by the Federal Deposit Insurance Corp. (FDIC) is protected up to the FDIC coverage limits — $250,000 per depositor, per account ownership category, per bank. FDIC insurance applies regardless of whether the account is opened at a physical branch or through the bank’s website.
Some credit unions also offer high-yield savings accounts. Credit unions have deposit insurance through the National Credit Union Administration (NCUA), and the coverage is essentially equivalent to FDIC insurance.
Keep in mind, FDIC and NCUA deposit insurance protects accounts only if the financial institution fails. While federal regulations limit your liability for losses related to certain types of fraudulent activity on your savings account, you’re still responsible for promptly reporting any unauthorized transactions to your bank. Make sure to monitor your bank statements and set up account alerts to help you catch suspicious activity.
Pros and cons of high-yield savings accounts
A HYSA can be useful for growing an emergency fund or working toward short-term goals. However, it has some disadvantages compared with other types of accounts. Here are the pros and cons to consider:
Pros
- Higher interest rates: High-yield savings accounts typically earn higher returns than other types of savings accounts.
- Flexible withdrawals: Unlike CDs, high-yield savings accounts usually allow multiple no-fee withdrawals each month.
- Safety for savings: High-yield savings accounts generally come with FDIC or NCUA insurance.
- Digital tools for easy account management: You can often open and manage your account online or through a mobile app.
Cons
- Variable interest rates: Like any savings account, a high-yield savings account features a rate that is subject to change at any time.
- Access to funds: In most cases, you must make an electronic transfer to a checking account to access your money.
- Limited customer service options: Customer service communication may be limited to phone or online chat.
- Withdrawal limits: Some banks cap your monthly withdrawals, though many removed this limit during the pandemic.
How to open a high-yield savings account
The process to open a high-yield savings account will vary slightly between financial institutions. If you’re opening an account with an online bank, you’ll fill out an online application and initiate an electronic transfer to fund your new savings account. Some banks may allow you to mail in a deposit instead.
Whether opening an account online or in person at a traditional bank, you’ll generally need to provide your ID and Social Security number.
How to choose a high-yield online savings account
The interest rate is only one of many factors to consider when choosing a high-yield savings account. Here are four other important factors to look at:
- Rate history: Besides the current interest rate, look at the account’s rate history. Does it have a pattern of offering above-average rates? Have its rates remained relatively stable over time?
- Account fees: Avoid high-yield savings accounts with monthly maintenance fees, even if the fees can be waived by keeping a minimum balance. Also, watch out for fees that apply if you exceed a certain number of withdrawals per month.
- Deposit requirements: Most high-yield savings accounts have a minimum initial deposit requirement of $100 or less, but a few require an initial deposit of $1,000 or more. Once opened, accounts may have minimum balance requirements to earn the advertised interest rate or to avoid monthly service fees.
- Withdrawal restrictions: Check the limits on the dollar amount of transfers, the limits on the number of transfers, the speed of transfers and the hold time before deposits become available for withdrawals.
Alternatives to high-yield savings accounts
- Traditional savings account: Opening a traditional savings account may be a good option if you want access to a physical branch, like to build relationships with your local bankers or prefer to keep all of your accounts in one place.
- Money market account: A money market account combines features of both savings and checking accounts. Like a HYSA, it generally comes with FDIC or NCUA insurance to protect your deposits. The key differences are that money market accounts often include a debit card and check-writing privileges, and they generally earn a lower rate than HYSAs.
- CD: A high-yield savings account usually allows unlimited deposits and multiple monthly withdrawals without fees. However, a certificate of deposit (CD) typically permits only an initial deposit. Withdrawals before the end of the CD term usually incur an early withdrawal penalty. Additionally, a CD has a fixed rate until its maturity date, while high-yield savings account rates can change at any time.
- Money market fund: A money market fund is not a bank account but a type of mutual fund available through brokerage firms. It’s not federally insured like HYSAs tend to be, although it’s a low-risk option. Money market funds often have yields comparable to high-yield savings accounts. In certain situations, money market fund yields can be higher.
Methodology
The savings accounts in our rate table are ranked based on APY, with the highest APY listed on top. APYs are checked daily to ensure they match the APYs listed on the financial institutions’ websites.
If the savings account has tiered rates, the APY listed is based on the deposit amount specified in the rate table’s filter box. If the deposit amount is below the minimum balance required to earn the APY, the account may not be listed. If the selected deposit amount is above the maximum balance required to qualify for the APY, the account may also not be listed.
To be listed in our rate table, the savings accounts must be from either FDIC-insured banks or NCUA-insured credit unions.
Frequently asked questions
Is a high-yield savings account worth it?
A high-yield savings account is a solid option if you’re looking to earn more on your savings than you would with a traditional savings account. When choosing a savings account, compare APYs, fees, requirements and withdrawal limits so you can choose the right option for you.
Can you have multiple high-yield savings accounts?
There is generally no limit on the number of high-yield savings accounts you can open. However, if you’re depositing more than $250,000, you’ll want to spread the funds out between different institutions to stay under the FDIC or NCUA coverage limit. Additionally, you may have a problem opening a savings account if your ChexSystems report shows a negative banking history.
Do high-yield savings account rates change?
High-yield savings account rates are usually variable, which means they can change at any time. Banks and credit unions may adjust their rates in response to changes in the federal funds rate.
Does a high-yield savings account compound monthly?
It varies by financial institution. Some banks offer monthly compounding on savings accounts, while others provide daily or quarterly compounding. Daily or monthly compounding is the most common. To find out your bank’s compounding schedule, check the website or account agreement.
Do credit unions offer high-yield savings accounts?
Yes. Some credit unions that offer high-yield savings accounts include:
- Langley Federal Credit Union
- Alliant Credit Union
- Ideal Credit Union
- First Technology Federal Credit Union
- Lafayette Federal Credit Union
Do you pay taxes on a high-yield savings account?
You generally must pay ordinary income taxes on savings account earnings. Banks and credit unions are required to report interest earnings on Form 1099-INT when the total interest earned on all accounts during the previous tax year is at least $10.